It is not just behaviour that defines loyalty; loyalty has another very important component - emotion. And it is a combination of behaviour and emotion that underlines loyalty.

What is ‘Loyalty’?

Legend has it that a Russian Diplomat was asked on his deathbed whether he had been loyal to his wife. ‘Frequently,’ he said – and collapsed….

In the pre-liberalisation age in India, we always flew Indian Airlines and we all had MTNL phones. Did that mean we were ‘loyal’ to these brands? Maybe – and maybe not. We didn’t really have options – so we were perhaps loyal by default.

Even today, when there are multiple brands to choose from in any category, take the case of a customer who has had a Vodafone cell connection since inception – does that mean he/she is a die-hard loyalist of Vodafone? Again, maybe – and maybe not! At the other extreme is a customer extremely passionate about his EPL football club. Does he play football? No. Does he go to all the matches? Maybe not.  Is he loyal to his club? By any stretch of imagination – yes!

The fact remains that it is not just behaviour that defines loyalty. Loyalty has another very important component – emotion. And it is a combination of behaviour and emotion that underlines loyalty.

The Loyalty Matrix

The matrix is defined by four quadrants:

1. High Emotional and High Behavioural Loyalty – This is wedded bliss! The customer feels strongly about the brand – and the feelings are translated positively into behaviour. This is a high profit quadrant for any marketer – and a focus for all retention efforts. To lose even one customer in this quadrant is a serious blow to the bottom-line. The objective here is to keep the segment positively motivated – since their emotions are driving behaviour.
   
   
2. Low Emotional and High Behavioural Loyalty – Customers in this segment are prisoners of their behaviour. They no longer have feelings for the brand but are trapped in a cycle of behaviour – either because of inertia or because they have no option (much like the Indian Airlines example earlier). They don’t like what they are doing – or they are immune to their behaviour. Both of which are dangerous situations! This is a potential high risk segment. The moment they break out of inertia or the moment an option is available, they will attrite. Since their behaviour is valuable, the focus needs to be on recognition and soft measures that will build up their emotional loyalty to the brand. They need to feel good about themselves when they choose the brand.
   
   
3. High Emotional and Low Behavioural Loyalty – Feelings are strong but they are not translated into behaviour. Possibly because of low purchasing power; possibly due to inertia. These are the future stars who need to be groomed and invested in. Leverage the positive feelings to drive behaviour. When feelings drive behaviour, the resultant behaviour is always more long-lasting. The task is to think of innovative ways to stimulate trial and then drive frequency of purchase.
   
   
4. Low Emotional and Low Behavioural Loyalty – These are the rotten eggs who need to be weeded out of the system before they corrupt the others. The segment requires no investment in time, money or effort.

The goal ultimately is to drive all customers towards Quadrant 1. Two questions arise at this point:

1. How do we do this on a consistent basis?
2. How do we allocate marketing investment to each segment?

How do we do this?

By building strong bonds with your customers.

A customer goes through various stages in his/her relationship with a brand:

• ‘I don’t know about it’ – LATENT/UNAWARE
• ‘I have heard about it’ – AWARE
• ‘It’s good – it meets my needs’ – ACCEPTANCE
• ‘It’s better than other brands’ – ADVANTAGE
• ‘Nothing beats it – it’s MY brand’ – BONDING

As a customer moves up the loyalty ladder, choices made are conscious. Loyalty moves from passive to active. And the bonded customer begins championing the brand to others.