Flexibility Earns Loyalty

A company that wishes to have loyal customers must establish long-term trusting relationships with them by demonstrating (not merely claiming) an interest in serving their needs.  This is most clearly demonstrated when a firm is willing to deviate from standard operating procedure to help customers in unusual situations, even if it is contrary to the firm’s short-term financial interests – and in return customers are willing to continue to do business with those firms even when it is not in their own short-term financial interests.

Consider that “brand equity” is the extra amount of money a customer will be willing to pay for a product of a specific brand, as opposed to a generic product that satisfies the same needs.   The difference in cost is, in a very real way, the financial sacrifice that a customer is making in order to maintain a relationship with the brand.   And they expect reciprocation.

Consider Nordstrom’s chain of department stores and the stellar reputation they have for customer service.  In particular, there are a multitude of legends about its liberal returns policy: refunding without a receipt, even for merchandise the firm doesn’t sell, being willing to take back an item of clothing that the customer has worn but no longer fits.     Many other stores have rigorous returns policies and seem to assume that the customer is cheating them, but being willing to give trust to customers earns Nordstrom’s trust (and loyalty) in return.

Companies with an eye toward efficiency gravitate toward practices that deliver the least value for the most amount of money, which is diametrically opposite to what the customer demands of a vendor.  Those that seek to have impersonal transactions find that they are considered to be impersonal.   The “tit for tat” rule of exchanges, giving and receiving in equal value, is meeting the customer’s minimum expectation – it is not grounds for loyalty.

Friendships and other human relations involve exchange, but it is not specific, exact, or immediate.   Loan a neighbor a cup of sugar and she will return to you some of the cookies she baked, rather than a cup of sugar.   Imagine how awkward it would be to pick up the tab for lunch one day and the next time you dine together the colleague insists he buy you a lunch of the exact same value, to the penny, or settle the difference in cash.   Or even a friend who needs the loan of a trifling amount of money insists on a repayment schedule and an exact rate of interest.    These relationships involve give-and-take, such that precise accounting is not only unnecessary but inappropriate.

Granted, the commercial world involves money and accounting, and a business cannot sustain itself on the vague notion of offering “some” product for “some” money to be paid at “some” date.   They have their own suppliers and employees who expect to be compensated regularly and in specific amounts, and the business must manage its cash flows in order to remain solvent – so people expect there to be more specificity in their relationships with companies.   But the more flexibility that a firm shows in ensuring the customer gets the value he intended from his purchase, the greater satisfaction and loyalty.