If you love someone, set them free: strengthening customer loyalty during COVID19

By Richard Dunkerly, Commtractor and former C Suite level corporate communications writer and strategist, with 20 years plus experience in financial services, including  business continuity, internal communications, media relations, marcomms and government affairs.

We’ve learned a lot during this pandemic. About ourselves, our leaders, and the brands with whom we interact.

These unprecedented times see many businesses fighting for their very survival, everyone understands that. Most of us are even prepared to cut brands some slack, accepting that lower service standards may be unavoidable from time to time. But even so, some brands still have managed to underachieve against our greatly reduced expectations.

Over the last few months I’ve seen companies employ two vastly different strategies to build loyalty amongst their existing ‘valued’ customers. I call these the ‘golden handcuffs’ and the ‘golden key’.

Golden handcuffs seem shiny but are unashamedly locking you up.  One well-known local airline (which I shan’t name) employed this strategy. Despite the fact that the prospects of any international travel in the next 18 months seem pretty remote, they insisted that customers booking non-refundable airfares couldn’t get a refund, only a flight credit. Fair enough on one level – a strictly legal one – but pretty harsh on another. Even more disappointing though is that customers who had paid extra for refundable airfares still ended up being railroaded into flight credits, because their customer service teams were so chronically under-resourced, they were simply uncontactable. (The irony that staff stood down by this airline were offered the chance to work in the Woolworths call centre should not be lost on anyone!).

At the other end of the spectrum is the golden key strategy employed by The Sydney Theatre Company. Rather than locking subscribers in a cage, the STC gave them the key to unlock it, meaning their loyalty was earned, not mandated. If any sector of our economy is underfunded it’s the arts. And yet despite their very future being threatened, the STC’s approach was to give everyone a full refund if they wanted one. From the very start they were quick to communicate, responsive, and took nothing for granted. Subscribers were offered the chance to take a full refund, a credit against a future performance, or the ability to turn that amount into a tax-deductible donation. I guarantee that by being so quick to offer refunds, they actually encouraged more people to take credits or even make donations instead. They almost certainly gave less refunds than they would otherwise have done and improved their reputation in the process – a big win!

Every article I have read about customer loyalty during Covid talks about the importance of communication. Sure, communication is important, but it’s not enough in itself. It needs to be backed up by genuine respect for customers – their brains as well as their wallets. And that means you need to do more than just say ‘thank you’. It means that to build true customer loyalty, you need to make it easier for them to leave.

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