Much is made of retaining customer loyalty? Why? Because typically it does not happen. Perhaps loyalty is an illusion in this day and age? Perhaps it always was? Shakespeare wrote many plays predicated on disloyalty.
Why is loyalty so important? Because it is less expensive to sell to existing customers than to find new ones. Or at least, that’s how the theory goes. I wonder though.
A well-known quote by the author, socialite and dilettante, Oscar Wilde, has “accountants knowing the cost of everything and the value of nothing”. The value proposition is an equally well-known marketing topic frequented by the marketing pros in big corporations.
If you ask about and discuss value propositions, you will likely be considering new sales to new customers or new sales to old customers. You’re likely talking about the sales and not the customers though.
What’s the value proposition for customer loyalty? That’s a question worth considering. What’s the value proposition for company loyalty to customers?
In 1996, Charles F. Fombrun wrote an intriguing book titled “Reputation - Realizing value from the corporate image”. It’s printed by Harvard Business School Press. Blessed by Harvard revered by Corporations makes it worth reading - I guess.
Today, realizing value from corporate image seems to me to be a non starter. What corporate image? Enron et al? And beyond Enron consider all the inquiries by New York’s Attorney General and the United States Senate. Indeed, what image?
Mr. Fombrun starts his book with a quote from Shakespeare - “The purest treasure mortal times afford Is special reputations; that away, Men are but gilded loam or painted clay.” The quote is from Richard II, the Richard of “my kingdom for a horse” fame. Where was the loyalty when Richard needed a horse?
A more intriguing Shakespearean quote for the book might have been from Macbeth. “O what a wicked web we weave when first we practise to deceive.” Perhaps, even talking about value leads us to deceive? Self deception.
Yet there is value in understanding how Mr. Fombrum ‘frames’ (a deceptive word) reputation. He gives it four clear components: credibility, reliability, trustworthiness and responsibility and offers the following definition of a ‘corporate’ reputation:
“A corporate reputation is a perceptual representation of a company’s past actions and future prospects that describes the firm’s overall appeal to all of its key constituents when compared with other leading rivals.”
So there’s the value of reputation from a corporate perspective. It should also give small businesses an idea of where their opportunities are.
First a ‘do’ - add the customer and people to this definition - better still put the customer first. Secondly a ‘don’t do’ - do not be a leading rival of a big corporation - if you do, you are no longer a small business - you are a set past actions and future prospects - nothing to do with people.
People and personality - how they communicate, how they are treated, cared for, supported - is what makes a small business successful. And with people and personality lies the reputation of a small business. Interesting choice of words - lies - don’t you think? Back to Richard II - uneasy lies the head.
After many years in corporate roles and as a small business owner, today I’m a writer. My pith and pitch are words. I play with and on words. I have fun with words and the ideas they express. If I’m a salesman, I’m selling ideas and concepts dn the notion of creating awareness. Today, I’m suggesting what is perceived to work for corporations, perhaps doesn’t and in any case often doesn’t work for small business.
Corporations are large hierarchical organization with investors, staff departments and investors. No wonder they’re impersonal. In such an environment people get lost - it’s called the fog of business. Why is a Human Resources department called human resource? Because a human is seen as just another commodity needed to make the business work.
Small business focussing on people, on customers, on awareness of individual needs and problems and on relationships means the small business will be ‘resourceful’ and adapt to the needs not control them.
I started this article by suggesting loyalty was an illusion. It may be. But does it have to be? Let me suggest that it starts by how you treat people. Where it ends, I don’t know. But in my next writing on the subject, I’ll comment on the surprising phone call that led me to think about loyalty.
The A to Z of Small Business Sales - Loyalty and the Value of Loyalty - Part 1 - To learn more about this author, visit Norm Tucker's Website.
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Norm Tucker
(Visit Norm's Website)
Independent writer and consultant with
corporate and small business experience.
See also two other sites:
Westcoastwriters.com and
Newglobalfamily.org. Comments and
questions welcomed.
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