Emotional Loyalty

Amplifying Emotional Loyalty Through Customer Capitalism

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.

Decoding the Concept of Customer Capitalism 

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

Riding the Wave of a Customer-centric Approach 

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:

  • Apple-Retail store founder Ron Johnson’s grounding philosophy and inspiration while designing the Apple store was ‘Love thy neighbors as thyself. He explains his goal was to design a store based on love. To make sure customers feel the love, he invested in real-time customer feedback using various methods, as well as other unique features, while avoiding commission-driven compensation which is typical in electronic retailing.
  • American Express– AMEX proudly declares, “We love our customers”, on its billboards. The multinational corporation that specializes in payment card services shows customer love by providing a sufficiently large credit line, protection against merchant disputes, and other various perks and benefits.
  • Southwest Airlines– This customer-centric airline has a heart logo on every aircraft. Their vision-‘To be the world’s most loved, most efficient, and most profitable airline’. The company goes the extra mile to show customers love by avoiding baggage fees, flight change fees, etc., removing the burden of additional charges and enabling customers to truly enjoy their travel experience.

Relationships between brands and customers are getting over-complicated while, in essence, they’re like any other relationship in lifefragile 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

  • Chewy– This American online retailer of pet food and other pet-related products has a high customer satisfaction rate, despite the fact it has no face-to-face contact with its customers- all thanks to the love it extends to them. Chewy has a dedicated internal wow team responsible for dreaming up and executing remarkably thoughtful and kind solutions. For example, the company sends flowers to bereaved pet owners when their pet passes away. Chewy understands pets hold a special place in their owner’s heart. Their services ensure both the pets and pet owners are cared for and their needs are more-than-sufficiently met.
  • Marriott International– This hospitality icon uses the golden rule in the design of its training programs, and runs TV commercials that promote “treating others like we’d like to be treated has always been our guiding principle’. Post-9/11 when many employees couldn’t work enough hours to qualify for health insurance, Marriott’s executives extended coverage to these employees. They did the same thing after hurricanes Irma and Maria struck Puerto Rico in 2017.

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.

How Customer Capitalism Creates Emotional Loyalty 

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

Why Emotional Loyalty Is the Golden Ticket to Business Growth 

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

  • Marketing Efficiencies-Emotionally loyal customers will stand by you through thick and thin, be it price increases, supply chain issues, or other challenges. Their purchase decision is less influenced by such factors, since they’re emotionally connected with your brand. Over time it becomes exceedingly easy to sell to emotionally loyal customers and you needn’t rely on expensive ad campaigns to increase purchases or improve retention rate.
  • Influential Brand Representatives-Emotionally loyal customers are your brand mascots that potential customers may look to for advice and recommendations. Their long-term association with your brand and their unfailing loyalty encourages them to become powerful independent influencers. For example, Nike and Apple customers have various groups on social media platforms that aren’t sponsored by the brands. These customers not only create a community of loyal customers but also influence the potential audience.
  • Increased Trust-Cross-selling and upselling are easier with emotionally loyal customers. They’re more trusting of your brand and more open to trying other products and services under your brand’s umbrella.

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 pointsthrough user research and continuous evaluation of the buyer and seller experience using usability testingis 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

  • Brand Advocates-Emotionally loyal customers are active brand advocates and promoters. Their earnest and unfailing trust of your brand encourages others within their circle to switch. Moreover, they actively endorse your brand through recommendations and word of mouth. Brand advocates have the passion to bring in new customers and organically promote your brand. Meaningful incentives motivate them to refer others.

“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

Fostering Brand Advocates Through Loyalty 

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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