Should we stay loyal to brands?

In the past year, I have noticed I am less likely to be loyal to brands mainly due to their lack of reciprocation of that loyalty. As a marketer by trade, I am most fascinated when they don’t seem to care when you defect.  I find the number of cases where no one even asked why I was not renewing or choosing another solution even more fascinating.

More brands seem to be giving up on the most loyal customers and only chasing new customers. Maybe they are jumping on the “How Brands Grow” bandwagon and going after new customers rather than trying to maintain their existing ones or understanding why they defect.  As Jon Lombardo suggests, every marketing book I have read preaches “lifetime value,” we must keep our most loyal customers. I have only had a few clients that did not track or at least calculate lifetime value, so why are so many brands seem like they don’t care?

The top two questions on Shark Tank after asking about revenue are: “What are your customer acquisition costs?” followed by “What percent of reorders? and we can add a third, “What is your churn?.” We should spend marketing dollars on acquiring new customers, as they are the growth element we need. Still, we also need to retain those existing customers by ensuring the product continues to meet their needs.   

In every case, when someone does a demo of my tools and does not sign up or cancels, I ask them why they canceled or did not sign up. I do it, hoping to find a way to fix the problem so that we don’t lose others for the same reason. Learning how the solution or tool does not meet their needs is precious.  That is excellent feedback, especially if there are any patterns, use cases, or a defect in the tool or process.   I find that most people with exceptionally high ticket items don’t ask. Do they care or have a process to ask? 

I have used some brands I defected from for 20 or 30 years, and none of them asked why or even made any genuine attempt to retain me. At the risk of sounding like a diva with over-the-top expectations, most of these examples below are because they have deviated from what I had come to expect or was promised from being loyal to the brand. 

State Farm Insurance

The first significant defection was State Farm insurance. They were my parent’s home and car insurance company, so when I returned to the US from living in Japan and bought a car, I went to their agent and never shopped around.   While I have changed agents in our various moves, we always kept State Farm mainly because if I had a problem, they took care of it, and we got a bunch of multi-product and multi-year customer loyalty discounts.  In the last few years of using them, I had various problems with their support staff. The deal breaker came down to the frustration of account management and billing issues. Especially with insurance for rental properties and our businesses, the junior agent tried to force a single payment for everything rather than allowing the individual entities to pay individually. The local office and national customer service representatives kept telling me it was “easier for them” and did not care about my reasons for keeping things separate. I had previously escalated issues to the primary agent; they were fixed for a while, then back to problems – all because of the junior people who did not seem to care.   When I shopped around, the Liberty Mutual agent got back to me immediately, gave me a great price based on the bundle, and allowed individual payments with auto-pay deducted from the various bank accounts, which helped me.   

To date, neither the agent nor State Farm has called me to ask why I left. A nearly 30-year relationship with a house, rental properties, and multiple cars is gone, and no one seems to care. Even if they could not win me back, they might want to know about the issue.

American Express Platinum

When Motoko and I sat down one day and looked at our mix of credit cards, we felt we had too many cards and wanted to consolidate them to get the best deals, benefits, and, of course, miles. Ultimately, we settled on just a few cards: the United Airlines Card and Chase Sapphire Reserve, which offered the same benefits, except the Delta lounge, as my Platinum American Express.  

When I called American Express after 20 years of having the card, which they proudly display on the card, they did try to talk me out of it but offered no real reason to stay other than the benefits of the card that I replaced with the Chase Sapphire card.  They reminded me that they had added a $15 credit for Uber each month but also raised the monthly fee by $150.  Due to overcrowding, I could barely get into an Amex lounge, and they stopped the 2-for-1 business class tickets, which was a fantastic perk.

The sad thing is that since I canceled my card, I have received 50+ mailings, and I get stalked on social media to sign up for the card that I had.   They had me, and any effort most likely could have kept me, but now they will spend a fortune to try to get me back.  There is not much they can offer and I was not expecting much but did expect to have them try to retain me.

Marriott Bonvoy

This is a two-time defection. For 15 years, I was top tier with them, typically spending over 275 nights in their hotels worldwide.  Slowly, I started to have more and more issues to where nearly every stay had a problem.  After a great experience at Westin Malta and Delhi, I shifted my loyalty to Westin, a member of the Starwood family. Not a single call or email from Marriott as to why I stopped staying with them. For someone spending that many nights, it should have flagged some database to ask the question why have you stopped staying?

Shifting my loyalty to Starwood, I had an amazing experience and ultimately earned Lifetime Platinum status. Then, just like that I am back with Marriott when they purchased Starwood. I did stay at Westin Hotels, and slowly, they started to adopt the same nickel-and-dime approach and lack of caring for customers. Despite having Lifetime Platinum status I do not really go out of my way to stay at Marriott properties because the benefits are intermittent and the rates are exponentially more than I can get without loyalty.

Asking People Why

I believe it is essential to ask why people are leaving the brand and if you can try and keep them. They may not be all that valuable to them in the long run and that is understandable. I contacted a software vendor, Active Campaign, to downgrade to a lower level, and they told me that it was only for new customers. They asked what I was not using and why I needed to pay less. I told them they doubled my subscription cost, and I was not using most of the features, so I wanted to use the basic option. The next email was interesting; they said they could not offer that rate. They then thanked me for being a customer and wished me good luck.