Loyalty is created from the Perceived Value found in the overall Customer Experience.
The greater the perceived value, the greater the chance the customer will choose to be loyal to your products/services and brands you have worked so hard to develop.
Consumers will walk away from your brand or can be stolen away for a variety of reasons, but rarely will they knowingly walk away from a product or service choice they strongly believe creates the greatest level of value for them when they consider all the available alternatives or substitutes.
So, how do people recognize value from a product, service or brand?
The value in the overall Customer Experience is defined by the four incremental experiences described on the next page.
Primary Process Experiences
Perceived value is driven by your primary processes, those that directly touch the customer in some way, including billing and credit systems, program and system support, technical assistance, etc.
Value is driven by the price of your products and services. These prices must either be in line with your competitors’ prices or demonstrate commensurate additional benefits and advantages in delivery of the other three drivers that justify a disparity in price.
Perceived value is driven by the quality of your products or services as compared to the quality of your competition’s products or services.
Customer loyalty is driven by the expertise and responsiveness of your front-line employees to the customer’s tangible and intangible business needs and the customer’s perception that your entire service system is working to create a tailored solution requiring low effort on the customer’s part.
Perceived value in each of these areas is the direct result of both the tangible and intangible benefits the customer believes he receives over the life-cycle of the relationship. Tangible benefits are those that can be directly tied to the products and services the company offers. Intangible benefits are those extra benefits that your customer receives and that assist in satisfying your customer’s non-product related needs, such as stress, uncertainty, fear, etc
As competitive advantage declines, the intangibles increasingly define value differentiation in the customer’s mind.
Perceived value creates loyalty when the customer believes the company is his valued strategic partner and the company’s products and services (tangible and intangible benefits) are essential to achieving his goals and objectives. Loyalty lives in the area of the Valued Partner, where the customer believes the company sits inside his circle of concern to help him deal with his competing forces on a consistent basis.