Customer loyalty is no longer enough

The owner of this store knew all his customers by name, and was happy to extend little favours like a couple of free sweets whenever we kids accompanied our mother on her shopping. Then one day a fire destroyed part of the store, and put this guy under considerable economic stress. He couldn't afford to stock the brand of biscuits we were used to, or the bar of soap that my mother would swear by. I remember my kid brother asking, ' So if they're not available there, why don't we try something else, or at least go to another shop? '

My father smiled and said, 'Well, as for the shop, it's not on. We are committed to this guy and his shop. So we'll just have to live through this and wait for him to recover.'

Nothing much has changed since then. Every marketer today is under pressure to develop strategies which help them gain the same commitment from their customer base. Not just loyalty, but more importantly, commitment. It is not so difficult to find customers who are loyal and apparently happy using your brand. Yet some of these same customers defect to a competing brand at the slightest hint of a price-off. Why? Because while they are using your brand and may have done so for some time, yet they have not necessarily developed any strong feelings or relationship with it in the meanwhile.

Feelings determine commitment; feelings are psychological and are an expression of what is in the customer's mind. So while all committed customers are loyal, the reverse might not be true. And in such times of narrowing product differentiation and merging brand propositions, customer commitment determines long term brand value.

Committed customers usually like your advertisements more, are willing to pay more for your brands, and will go out of their way to find your brand. It has been empirically proved that committed customers devote most of their category spending to the brands they are committed to, they are less price sensitive, and more resistant to competitive claims. Even in this day and age of increasing advertising expenditures, committed customers are actually very often your most effective communicators, as brand ambassadors.

The earlier you identify the strength of commitment of your customer base the better your chances of winning in the marketplace. Because that gives you answers to questions such as - How many of my customers are secure, and how many are vulnerable? Is my brand in the danger of decline, or does it have the potential for growth? How do I allocate my marketing resources in the most effective way? These are all questions which have a direct bearing on the future for your brand and its profitability.

The big question therefore is how do you go about monitoring and measuring customer commitment? You need a research tool that has the ability to segment customers according to their relationship with the brand and the category. For example, what proportion of your customer base is 'Entrenched' i.e. customers who are unlikely to switch brands in the foreseeable future? Or, what proportion of your customer base is 'Shallow' i.e. those who might switch, or are actively considering alternatives? How do these proportions compare with your competition? On the other hand you should also want to know how likely it is that non-users of your brand might convert and start to use your brand?

All of this information is now available in terms of hard, well defined numbers. The TNS Conversion Model is considered to be the world's leading research tool in this area of investigation.

It has been used in over 5000 research studies across 100 countries by companies who are interested in developing long term brand relationships with their customers. For where these relationships are strong, the lifetime value of the brand is higher. And to develop relationships it is not enough to know what customers are doing in terms of apparent loyalty ; it is imperative to know how they are feeling i.e. to measure customer committment.