Only 35% of customers are completely satisfied with their brand relationships, according to the latest R/GA’s Brand Relationship Design report (research study polled 13,500 U.S. consumers). Something evidently is not working as consumer expectations continue to rise, disappointment increases. Brands need to learn to deal with it, and a good starting point is to look at how they are managed today.
Dispersed shareholding is becoming an increasing problem for the economy. Since any investors own enough shares to control a company, management is delegated to the board of directors. It can raise several challenges, including slower decision-making, less flexibility and agility in responding to change.
You know what I mean. We can list the examples with one of the saddest, Southwest Airlines. Once great airlines, but since the founders left and accountants took over, they focus more on a cost centre than a profit centre powering their customer experience.
Such executive teams have lots of financial expertise but often lack a fundamental understanding of the role of customer experience and the value of building relationships with their customers.
And when your primal goal is the next quarter’s financial results, you tend to focus more on customer acquisition than retention. Buying traffic may sound reasonable when your temper depends on the next day’s stock valuation.
It is why I had goosebumps listening to the conversation with the CEO of the Maxol Group, Brian Donaldson, in episode 318 of “Let’s Talk Loyalty”. The Maxol Group is a fourth-generation family-owned Irish business, leading in fuel, coffee, car wash, and convenience store in Ireland, operating at the heart of Irish communities for 102 years.
Family-owned companies tend to work and behave differently than the ones with dispersed shareholding. And loyalty positioning is the main distinguishing attribute. Here are the five loyalty lessons I took from the latest shows with Brian from Maxol.
- The loyalty agenda comes from the founder. It set’s the proper priority for the entire organisation.
Founders look at the customers as the biggest asset of their business. They stay close to the daily operations and constantly look for a better way to solve customer problems. It secures the right sponsorship and priority for the entire organisation. With the backing of a senior leader, you will get the people, money, resources and decisions you need to drive customer loyalty.
- Loyalty is at the heart of the brand strategy, and its value proposition supports the company’s vision.
Many companies treat loyalty programmes as remote satellites or another sales and promotion channel. Nice to have but not embedded in the core of the broader consumer strategy.But you will see how close the brand vision and its loyalty program value proposition can be when you look at another family-owned company, IKEA, as an example. While the IKEA brand vision is “To create a better everyday life for the many people”, the IKEA Family value proposition tells us that “it is a club for you and everyone who wants to make life at home better”.
- Loyalty is a long-term strategy, not a short-term tactic
Family-owned companies consider everything in the long term horizon. CEOs come and go, family stays. They are built to last. Therefore customer loyalty can be passed from father to son and is always the priority. There is no greater reward for such brands than seeing adults kids of their good old customers still coming to the stores or using the services.
- Loyalty is an investment, not cost
Family businesses are prudent: everyone knows whose money is spent. Many of them self-founding daily operations. Therefore they watch every penny and calculate the return on investment. Over the years, they understood the value of customer retention from their financial, profit & loss perspective.
- Caring about the community
Family businesses start with the local community from which they grew. The emotional bond with their first customers, caring for their needs and constantly adapting to them, is the flywheel of their growth and becomes the company’s DNA as it expands. It is why these companies have such excellent penetration in their home markets, such as IKEA and H&M in Sweden and Maxol in Ireland. Even on a global scale, they always look for ways to be close to the local market and problems.
As loyalty professionals, we can’t change our company’s ownership structure. But we can evangelise the right mindset, as loyalty always starts with the right frame of mind.