Loyal Customers Hard To Shake

You have to try really hard to lose a loyal customer, that is according to Robert Passikoff and his “Rule of Six.” Once you have established credibility and loyalty with your customers, it doesn’t take much to keep them. So if you have heavy churn it is time to take a good hard look at what you are doing (six times no less) to lose em.

Following is an interesting take on customer loyalty By Media Post’s Marketing Daily’s Emily Burg…

Customer Loyalty Engagement Index Proves The 'Rule of Six'

Media Post’s Marketing Daily

by Emily Burg, Tuesday, May 1, 2007 5:00 AM ET

ROBERT PASSIKOFF, PRESIDENT OF BRAND Keys, Inc., has a theory he calls "the rule of six" that demonstrates the loyalty bond between a customer and a brand.

This year's airline category leader in the Brand Keys' Customer Loyalty Engagement Index--Jet Blue Airways--demonstrates not only that the tenets of the rule of six are true, but also that when it comes to customer expectations, often a customer's positive residual experience with a brand accounts for a lot of loyalty in otherwise disappointing situations.

"With the rule of six, a customer is six times more likely to give the product or service the benefit of the doubt, and that's what you see with JetBlue," Passikoff explained to Marketing Daily.

This comes despite JetBlue's recent customer service fumbles and weather woes that caused many airline industry analysts and frequent fliers to question the once customer-friendly airline's ability to maintain its favor among passengers.

Other elements of the rule of six are that the customer is six times more likely to:

· engage with the brand

· pay attention to ads and marketing

· think better of the brand

· buy the product again and again

· resist competitive appeals and price offers

· recommend the product or service to someone else

· invest in the company (if it's publicly traded)

Several other category leaders in the Brand Keys' Customer Loyalty Engagement Index show the veracity of Passikoff's rule of six theory, as well as the frequent disconnect between customer loyalty engagement and brand market leadership. On this list, ubiquity does not equal customer loyalty--although in the case of retail department store leader Macy's, a first-timer on the list, Federated's acquisition streak and rebranding of its purchases of Macy's stores made all the difference.

"I was one of the people that said Federated was going be great and people nay-sayed me," Passikoff said. "The minute they rebranded their stores as Macy's, they had a built-in audience. More people were mentioning the Macy's brand, and Macy's had been fine-tuning the shopping experience for over 100 years, plus they brought the reputation as the biggest store in the world, the owners of the Thanksgiving Day Parade and Santa Claus with them. That's what does it for them."

In the coffee category, Starbucks lost to Dunkin' Donuts--the first time in five years the brand didn't come in first place. "It's not surprising, given the trade-off they've done over the past 18 months for in-store experience," Passikoff said. "Starbucks can come back but even [Chairman Howard] Schultz himself has said they traded their brand equity for vacuum-packed bags of coffee.

"In the meantime, Dunkin' Donuts has come up from behind, and their past few years of brand efforts have been right on and resonating with what people are looking for," Passikoff said.

Toyota, whose Scion brand ranked No. 1 in a recent e-commerce survey, led the automotive category. "In the automotive category, reliability is high for customers so it makes sense why Toyota and Mercedes [tied with BMW for #2] is high," Passikoff explained. "But when you see that General Motors is at the bottom of the list [at #10], that tells you a lot about how people are looking at that brand. Their cars are just as reliable as Toyotas."

GM and Gap, which ranked at the bottom of the retail stores/apparel category (H&M/Victoria's Secret tied for #1), have become category placeholders, according to Passikoff. They have ubiquitous distribution and pricing and little else associated with their brands at this point.

"If your brand is going to engage someone, what does it stand for? There has to be a foundation for an emotional bond to be established," he said.

Emily Burg can be reached via email at emily@mediapost.com

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