Can customer loyalty be a bad thing?

Posted by Kevin Chamberlain

Creating loyal customers is a big part of succeeding and growing as a business.

Doing so will let you more accurately account for business cashflow, while better predicting what the future of your business might look like.

While customer loyalty is often a fantastically useful avenue for businesses to focus on, there are also times when it might not be as helpful. So, can customer loyalty be a bad thing?

Product loyal, or company loyal?

Incentives, discounts and rewards can be a great way to bring new customers into a business. Through methods such as these, you could earn a sale that might not otherwise have happened. The long-term aim is that these kinds of sales are the first steps to creating loyal customers who purchase more of your products and services going forward.

However, you should consider whether customers are coming back to you or referring people to you only because of a discount or offer you often provide on a particular service or product. These customers are not so much loyal to your business as they are to a cheaper end product.

Over time, this might begin to affect how profitable your entry-level incentives are.

This is why it’s important that you create loyal customer through a combination of incentives, rather than purely discounted prices.

See our customer loyalty scheme ideas

Combine enticing new customer incentives with a range of products and services that meet a customer’s needs, professional staff, and great customer service at every step. This will better ensure you create a loyal customer that’s both long-term and valuable to your business.

Will loyal customers respond to change?

Sometimes, a business may want to revamp their image, change the products and services they offer, or update their brand. Often, this process is a regular part of growing and expanding a business, as your company’s needs and goals change over time.

Consider how to approach changes in how you operate, or how you appear to customers – if it’s too sudden or drastic, it can be quite shocking and confusing.

Even if change is necessary for your business, there’s a chance that any overhaul may cause some outcry and controversy within a small section of your loyal customers. These customers may feel like they’ve been misled, or the changes to your business were not considered, ultimately causing them to move to a competitor instead.

However, it’s important to keep the long-term in mind. While some customers may dislike business changes, loyal customers should also be customers that you can afford to keep — that bring more money into your business than you invest in them to foster loyalty. With that in mind, remember that losing a small handful of customers in the short term is better than stagnating as a business and missing out of the potential for far greater growth.

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Show customers you value their loyalty

Customers who are loyal to your business also want to know that you value them as more than just a way to bring additional revenue and cash flow into the business. If you alter or change what you offer for any reason, customers might feel like their frequent custom is not recognised as meaningful – likewise if you make no changes, or don’t listen to feedback.

Issues like this can lead to customers feeling neglected – that their loyalty hasn’t been considered, and they weren’t consulted about changes you’ve made.

In order to ensure you create both loyal and profitable customers, it’s important to make customers feel as though they are valuable to you – and rewarding them for their devotion is often a simple yet effective way of retaining their business.

So, in answering the question ‘can customer loyalty be a bad thing?’, it is clearly important for businesses to show customers you value them. However, if you earn their loyalty in the wrong ways, or customers continue using you for the wrong reasons, their loyalty is less beneficial to your business as it could be.

Without incentive reward and loyalty schemes in place, customers might be less inclined to stay with you. Truly loyal customers enjoy using your services, and are more likely to stay with you whether or not you change your business in some way.

If customers are loyal to you for the wrong reasons, such as just a lower price than your competitors, changing how your business operates could lead to complaints and negative PR.

This is why thorough rewards and incentive schemes are important – they provide more reasons for customers to stay with your business, as well as reducing the risk of dissatisfied customers in future.

How CR Worldwide can help you create the right kind of loyal customer

Customer loyalty is an important part of growing as a business. There’s a lot to think about to ensure you do so effectively, however. Because of this, it’s particularly important that you have thorough and robust customer loyalty schemes in place. Doing so can help you create customers that stick with you for a long time to come, and really help your business succeed.

At CR Worldwide, we can design, launch and optimise customer loyalty programmes that help keep your customers coming back, time and time again. Our customer loyalty schemes are:

Easy to implement — Our loyalty schemes can be tailored to suit your business needs, letting you launch effective loyalty campaigns quickly and easily.

Easy to use — Our platforms are made to be straightforward. You can effectively track loyalty scheme performance, while customers can easily track their points, rewards and progress.

Easy to manage — Our programmes offer real-time reporting in participation with ROI and budget management. This makes managing, organising and tracking the success of your customer loyalty schemes quick and simple.

We love helping businesses to reach out, engage and retain their customers with our customer loyalty schemes. To speak to a member of our award-winning team: