What do great leaders and companies have in common?
“Great companies help people lead great lives-they are a force for the good. Great leaders build and sustain such communities. They inspire team members to forge lives of meaning and purpose through service to others-service not merely satisfactory but so thoughtful, creative and caring that it delights customers and enriches their lives.”
Fred Reichheld coined this approach as Customer Capitalism. Reichheld endorses, explains, and breaks down this new-age approach with empirical evidence and examples in his latest book, Winning on Purpose: The Unbeatable Strategy of Loving Customers. This groundbreaking, winning strategy is being adopted by leading enterprises globally.
In this article, we explore how Customer Capitalism is a catalyst in creating emotional attachment and loyalty among customers, and how you can leverage this loyalty to create brand advocates, increasing both customer retention and acquisition rates.
Table of Contents
To fully comprehend the concept of Customer Capitalism, you need to familiarize yourself with the Golden Rule-Love thy neighbors as thyself. The Golden Rule is the foundation of the Customer Capitalism approach. Unlike the traditional business approach, that focuses on maximizing shareholder value, Customer Capitalism focuses on enriching the lives of customers, loving them, and treating them as you expect to be treated by other businesses.
The traditional approach of maximizing shareholder value, as promoted by Milton Friedman, was legitimate, but targeting short-term maximization of shareholder returns today leads to mediocrity and decline. This is because the two crucial pillars of business are overlooked- the employees and the customers. Reichheld believes what makes a company great is putting its employees in the position to do great things for customers. Essentially, happy employees empowered to improve customer experience and satisfaction can make any business flourish and reach new heights.
“Happy employees (we call them our Titans), are the most powerful drivers of any business. Great employees take great care of clients. It’s a true differentiator to every successful business. With a culture of care, everyone succeeds.”
– Darin Lynch, Founder & CEO, Irish Titan
On paper, Customer Capitalism may seem unattainable, but in reality, many businesses have been successfully making the most of this approach. Let’s learn by example:
“Relationships between brands and customers are getting over-complicated while, in essence, they’re like any other relationship in life–fragile and driven by emotions. If you’re present, at the right moments over the right media, connection and trust between parties flourish. Whereas, everything can shatter if you’re not there for your customer during critical moments and events in their journey. Then all your previous efforts and time invested in building that relationship can easily go to waste”.
– Tonko Sarac, Head of Global Product Success – Marketing, Infobip
Other companies like Peloton, Warby Parker, Airbnb, Amazon, and various others have successfully incorporated the Golden Rule in their business tactics and have methodically and efficiently adopted the Customer Capitalism approach in their business practices.
Love may seem like a pretty abstract idea but it reciprocates, even in business. Customers are intelligent and receptive. They’re quick to notice genuine care from the brand’s side and, in return, become more trusting of the brand. When you earn your customers’ trust they openly share their vulnerabilities and needs, which helps you design optimal experiences.
“There is no silver bullet that will make customers LOVE your product as most choose products based on considerations like performance, price, style, etc. But the truly great brands continue to reinforce habit in addition to emotion, an equally powerful buying force. Whether loyal behavior is motivated by love or habit, successful brands tend to cultivate both!”
– Brian Dearth, Head of Strategy and Growth, Vaimo
Intuitive and personalized experiences further amplify customer satisfaction and customers reciprocate with their continued association with your brand. Trust, respect, and mutual admiration turbo-charge your loyalty growth engine. Continued association with your brand, supported by an extra touch of love and care, stimulates an emotional bond between your brand and its customers which is translated through customer loyalty. Unlike rational or behavioral loyalty, emotional loyalty is undeterred by external factors like price fluctuations, inflation, competition, and novelty. It’s rooted in emotional connections, nostalgia, and trust. This is precisely why emotionally loyal customers are a coveted asset all businesses strive to earn.
“Wurth implemented an omnichannel-focused eCommerce strategy with fully integrated customer touchpoints. Wurth’s customers can order products via hand scanners, smart shelves for auto-replenishment, via on-site vending machines-reaching customers where they are and making their purchasing process and stock management as convenient as possible-which increases customer stickiness and emotional loyalty.”
– Patrick Mikolai, Marketing Manager, Intershop
Emotionally loyal customers become invested in the brand and offer more than just their continued association with the brand.
“It’s all talk until you have to pay for it. It’s not a core value until it costs you money. Then you really know it’s something you believe in.”
– Darin Lynch, Founder & CEO, Irish Titan
“At Xngage we start with a fundamental strategy when designing B2B ecommerce solutions: ‘Designing for brand trust.’ While trust can be invisible, we all feel the pain as soon as it is broken. Starting with uncovering the users’ most common pain points–through user research and continuous evaluation of the buyer and seller experience using usability testing–is what we call the Golden Rule of a great User Experience (UX.) This UX process creates a sustained sense of trust, which fosters customer loyalty.”
– Charbel Abou Chaaya, Chief Digital Officer, Xngage
“A great way that I have seen brands invest in the emotional connection with customers is through giving back. People want to buy from brands that support organizations and causes that are important to them. The more a brand can make their customers feel like they’re a part of the giving, the better. An excellent example of this is Thrive Causemetics. Their giving mission is a huge part of their brand culture, and it’s evident in much of their marketing. They’ve been able to grow a large and loyal following for their products, and I would bet the giving mission is part of the reason why. Tapping into our human desire to help can tug at our heart strings and earn the brand that does it well a place in our lives for the long haul.”
– Cheyenne Ng, Director of Marketing, Zembula
Loyalty programs enable you to maximize the return from your efforts to create emotionally loyal customers and brand advocates. Annex Cloud’s Loyalty Experience Platform™ is purpose-built to help you deliver engaging, value-led experiences that build emotional bonds. Contact us today to explore how we can help you create lasting and profitable customer relationships.
Read the full solution guide, Embracing Customer Capitalism: How to build an advocacy growth engine.
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