Disloyalty and Business: Good, Bad or Just Plain Ugly?

Customer Disloyalty

Across America (and thanks to the spread of the Internet, across much of cyberspace), today, the day after Thanksgiving, is being celebrated as Let’s Shop Till We Drop Day, a.k.a, Black Friday. A day that sees scenes reminiscent of the end stages of the Trojan War, though with happier participants and smoking credit cards, not weaponry.

It is said that retailers make about 40% of their annual revenue on the strength of the Black Friday sales figures alone. Imagine that! And guess what drives these mega awesome sales? Customer disloyalty!

Think about it – what is the one thing that every shopper is looking for? A bargain. A great deal. A supersonic money saving deal of a lifetime (or at least of the year). And they’ll go where they get a bigger, better deal.

Not for their friendly, neighbourhood brand they have been patronising since they were yea high,  thank you very much!

[pullquote]Black Friday = Customer Disloyalty Day[/pullquote]Contrary to what every marketing tome states, customer disloyalty is everywhere. Every business worth its salt tries its best to prise their competitor’s loyal legion away from them and into their own fold by offering attractive deals. They promise heaven and earth to get new customers, thereby promoting disloyalty.

From energy companies to mobile phone rental, a customer is urged constantly to keep checking to see what is out there. What is Company X offering its customers? If it is a better deal than what you are getting currently, then switch, is the pitch. In fact, many of these companies offer attractive solutions to the defectors to attract their custom.

Result? A big saving in your monthly bills, be it from your gas supplier or broadband. The customer notches up a win, the supplier with the cheaper rate gains a customer. A few months later, when the supplier increases his rates, the customer will take his custom elsewhere. Rinse, lather, repeat.

So, is this disloyalty factor good only for the customer? And so, by extension bad for businesses?

Not really. Customer disloyalty, is equally rewarding for businesses too, as the increasing popularity of Black Friday sales, even in countries that do not follow the previous day’s Thanksgiving Day, prove. In fact, some businesses have turned this what could be a worrying phenomenon on its head and used it to their own advantage.

This rewarding or promoting a customer’s disloyalty is slowly evolving into a trend, one that is being embraced by the smaller businesses especially that haven’t got the might of a corporate behemoth standing behind it. How does it work exactly?

Disloyalty CardThe Disloyalty Card offered by a bunch of Springfield, Missouri coffee shops Photo: 417coffee.com

Well, its simple. A group of companies – say retail outlets catering to the same type of customer – band together and offer a group loyalty program, or a disloyalty card, if you will. Instead of a single store loyalty card, the group gives the customer options, wherein he can patronise any of these stores and win points (or a freebie from the first store they patronised). The beauty of this simple system is that, while a customer gets a muffin to go with his coffee (for example), a bunch of stand alone stores and companies band together to be a stronger unit.

This is a great marketing tool, especially when the competition is a multi-national brand, with branches all over the country and the wider world beyond and you are a small, stand alone, bespoke unit. Unity in strength isn’t just a cliché!

[pullquote]Customer disloyalty. Excellent for the customer AND the economy![/pullquote]Lest you think this banding together, promoting disloyalty only works for retail, and not for the B2B sector, I have two words: integration and program bundles.

First: integration. Take HappyFox, for example. It is a stand alone product that does amazing things to ramp up the quality of your customer service. But thanks to integrating the product with products that offer complimentary features, such as live chat, feedback survey, help desk accounting, screencasts etc, the integrated HappyFox family has grown more robust and well-rounded. So, you download one product, you read up about another related product that offers yet another service and get that and so on and so on. Sounds like a win, right?

Product bundles have been around in the software industry for a long time now; Microsoft Office, for example, which bundles together Word, Excel, Spreadsheet and provides them as one bundle. The software we buy has bundled with it some we have never even heard of but ends up being an excellent find in the end. So a value-add that also improves the visibility of the lesser known / newer product makes for an excellent marketing tool.

Loyalty and trust, inter-changeable at many situations, are bywords of sound business strategy. Be trustworthy and your customers will reward you with their loyalty is one of the first lessons you learn in any business. But there are times when being disloyal is the better option.

Customer disloyalty. Excellent for the customer AND the economy!

Does this mean that the days of loyalty are numbered? Share your views with us!

Lavanya Donthamshetty

Writer. Apple-lover. Follower of big brands. Interested in talking about all things customer support. Follow me on Twitter @lavanyad