Demand-side promiscuity (and control by customers)
Demand-side
promiscuity (and control by customers)
Customers are quicker and happier to switch between
suppliers. They are more positive about changing suppliers: they embrace it,
often seek it, and are confident about it. They are more demanding of their
existing products and suppliers and less accepting of error (although very loyal
customers can be very forgiving). Globalization, deregulation and easy access to
the Web enable consumers to seek the products they want. They can seek, source
and purchase the product and leave without ever talking to a salesperson.
Bob Tyrell [2] described the conditions for 'exit' behaviour in
social relationships and how this relates to buyer behaviour and loyalty.
Individuals are more confident about making their own choices, partly because
they have access to many more information sources than previous generations.
They demonstrate their new confidence by:
-
accessing the company how, when and where they want to;
-
controlling the relationship and not wanting to feel
controlled;
-
asking to be valued and treated specially, particularly if
they are a valuable customer;
-
switching suppliers if they feel aggrieved, or if they
receive unfulfilled or disappointing service 'promises'.
The Henley Centre's report, The Loyalty Paradox,
[3] demonstrates that while
companies often talk about their need to manage relationships with their
customers, few customers use this language or indeed behave in this way.
According to Frederick Reichheld [4] of Bain and Co, 'Between 65 per cent and 85 per cent
of customers who defect say they were satisfied with their former supplier'.
Reichheld suggests that sometimes customers stay because they are locked into
long-term contracts or because they are unaware of competitive offerings.
Reichheld proposes [5] the
'Loyalty Acid Test', which is a set of surveys that measures the loyalty of
customers, suppliers' employees and other corporate stakeholders. The Loyalty
Acid Test addresses the basic question: does this organization deserve your
loyalty?
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