A Customer Loyalty Fable

   There is a charming little bedtime story that is popular among corporate managers. It goes like this . . .
   A customer was lost in the woods. As he stumbled around trying to find a way out, he came upon various stores and businesses.
   “Can you help me?” he asked as he approached each one.
   “Forget it, pal,” they said. “You’re on your own.”
   Near despair, the customer saw a bright light through the trees. As he approached it he saw that it was the light of Our Company.
   “Can you help me?” he pleaded.
   “Of course,” said Our Company. “I will delight you with my service. I will be friendly and quick, and will always remember to thank you and ask if you found everything you were looking for and tell you to have a nice day.”
   “Oh joy, oh rapture!” cried the customer. “What can I do to repay your kindness?”
   “Just this,” said Our Company. “You must be loyal to me.”
   “What does that mean?” asked the customer.
   “It means that you will stay with me through thick and thin, better or worse. You will not fool around with other companies. You will tell your friends how wonderful I am, and you will not leave me if I occasionally do something stupid.”
   “Like what?”
   “Like making a few billing errors or getting your order wrong. Also, you will stay with me even if my prices are higher than other companies, or if another company opens up closer to you or if someone else offers a better selection.”
   “OK,” said the customer. “That sounds like a perfect deal. I accept!”
   “Wonderful,” said Our Company. “Then we will have a relationship, which I will manage.”
   So the customer married Our Company and they lived happily ever after.
   If only fairy tales could come true.
   Unfortunately, the real ending to the story is a bit more tawdry. What actually happened was this:
   Not long after they got married, the customer was walking in the woods when he came upon another company.
   “Wow!” said the customer as he looked the company over. “You’re really stocked!”
   “Why don’t you come in and sample my wares?” said the company.
   “Oh, no,” said the customer. “For I am loyal to another.”
   Continuing his walk, the customer saw yet another business.
   “Come check out my prices,” it said. “Have you ever seen anything so low?”
   The customer stared at the prices, which were so low they made him blush. Nevertheless, he declined the invitation to switch, saying that he was loyal to another.
   “What does the other one have that I don’t?” said the low-price provider.
   “Friendly service that exceeds my expectations every time,” said the customer.
   “OK, but it’s your loss.”
   The customer remained loyal to Our Company for some time, but eventually the temptation to stray became too great. He went to Our Company and said, “I’d like to start seeing competitors.”
   Our Company was devastated. “But what about your loyalty?” it said. “Don’t I delight you anymore?”
   “It’s not that. The delight is great, and nobody personalizes like you. I guess I’m just not a one-company guy. But we can still be friends.” And the customer danced away.
   “Come back!” wailed Our Company. “Oh, why do the good one always leave?”
   Just then the Good Fairy of Sensible Business Practices descended from above, fastened securely by a strong wire (for she was a sensible fairy).
   “What a tragedy,” she said. “You made a great couple.”
   “Why, oh Good Fairy, won’t customers stay loyal to me?” said Our Company.
   “It’s not you, it’s them. Customers are just natural philanderers who will break the heart of any business that wants a monogamous relationship.”
   “Are there no loyal customers, then?”
   “That depends on what you mean by ‘loyal’,” said the Fairy.
   “I mean, customers who feel a strong bond and are devoted to me and will act on my behalf. And pay a price premium. And stay with me when I screw up. And not do business with my competitors.”
   “In other words,” said the Fairy. “Your idea of a loyal customer is someone who can’t make rational business decisions.”
   “Well good luck with that.”
   Now as it happened, Our Company eventually learned how to attract rational customers who would do many of the things that it wanted imaginary loyal customers to do.
   But that’s another story . . .

Peter Gurney

This entry was posted on Monday, May 25th, 2009 at 9:24 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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