Quick Take: Building unbreakable bonds with your customers

Can we rethink customer loyalty as an opportunity to build mutual trust rather than a program to achieve incremental sales?

What is the relationship between innovation and customer loyalty?

At the heart of the movement to innovate distribution is an absolute need to push the boundaries of customer loyalty. The fight against the forces of disruption is a fight for customers. Distributors must do more than innovate their business models by adding new capabilities, locking in profits, and putting moats around customers. They must work with customers to help them transform their business model for the digital age. By doing so, distributors differentiate themselves as the “not disruptor.” Disruptors drive change from the outside by eliminating friction between distributors and customers and then replacing or defeating distributors. Distributors may drive change from the inside by offering to help customers improve their capabilities and business processes. This is at the heart of a distributor approach to innovation that collaborates and integrates with customers.

This brings me to customer loyalty programs. I don’t know about you, but I find very little inspiration in the advice of most companies offering customer loyalty solutions. I think it’s wrong to think of loyalty as a program that exists within a company’s business model. In this frame, achieving loyalty is viewed as a cost. The return on costs incurred to gain loyalty is measured in the company’s business as repeat purchases and incremental revenue. These are appropriate goals for any business, but they don’t jibe with my concept of loyalty. Loyalty is, first and foremost, a human value—one that exists between humans. This is true in life. Why is it not true in business?

For distributors, customer loyalty—especially given the fight for defeating disruption—is an opportunity to build unbreakable bonds. Achieving customer loyalty should be the purpose of every distributor’s business model. Loyalty flows from purpose. Loyalty is not a metric.

Thinking of loyalty only as “customer” loyalty is shortsighted and unimaginative. Loyalty is mutual. Loyalty is achieved by the actions of business people and their customers. The benefits of loyalty are achieved in the businesses of customers and their suppliers.

If unbreakable customer loyalty is possible, it is achieved by creating mutual value through knowledge, experience, commitment, and human connections. Business is a critical fabric of our society and B2B leaders, operating with purpose and creating cultures of loyalty, can help hold our society together.

Trust, not repeat purchases or revenue growth, is the true measure of loyalty. Do customers trust their suppliers? Do manufacturers and distributors trust each other? Do all of us, as citizens in our society, trust our fellow citizens? I can think of many examples for which the answer to these questions is a resounding no. Technology companies are under fire for dividing us and driving polarization, sometimes creating social contagions that lead to social unrest or diminished public health. The failings of the global supply chain are another. There are many more examples, big and small, in public view and not. Distributors can help by embracing customer loyalty as an opportunity for sustaining and rebuilding business, our economy, and our society.

Your take?

Distribution practitioners and innovators must take the lead, advocating for loyalty as a mutual outcome for conducting business in a way that creates trust. Every project for the digital transformation of business must include a loyalty objective. And, every technology initiative must be balanced by a project for doing business as humans for humans, with life-centered innovations. Loyalty is not a program. It is a responsibility.

Do you agree? Can you share plans or examples? Please share your comments below or reach me at mark.dancer@n4bi.com.