The Nature of Retail Customer Loyalty
In a recent RetailWire discussion ("Practicing Random Acts of Retail Kindness" July 2, 2009), the importance of gratitude, reciprocity and unexpected gestures in developing customer loyalty was considered. In a recent New York Times magazine feature, and in a forthcoming paper in The Journal of Marketing, Robert Palmatier maintained that gratitude "increase purchase intentions, sales growth and share of wallet." He went on to state that "most loyalty programs don't make customers feel grateful because the rewards are "earned" for repeat business rather than "unexpected." This set off a lively discussion on the nature of retail customer loyalty.
With few exceptions, such as Nordstrom, the business models of the national chains emphasize volume, scale and technology over personal interaction at store level. At best, they seem to strive for as convenient and seamless a transaction and experience as possible. Anything more seems to be beyond their reach. They are simply not structured to provide store-level employees the discretion implied in "unexpected random acts of kindness," as if that would build loyalty.
Loyalty is not built by having to "earn" anything, or receiving anything "unexpected," or even "random acts of retail kindness." The term "Loyalty Program" is an oxymoron. Loyalty can't be programmed; that's simply not the nature of loyalty.
Building retail customer loyalty starts with genuine engagement and concern for customers. It's earned one day at a time, one customer at a time, in personally meaningful one-on-one interactions that cumulatively build into an enduring relationship. There's nothing "unexpected" about it, it's as intrinsic to the retailer as turning on the lights and unlocking the doors.