Organizations need to be loyal to their customers if they want their customers to be loyal to them.

“Companies are adept at chasing new customers while watching the churn,” Keith Pearce, Vice President, Solutions Marketing at Genesys states. “Why else would they spend around $500B on advertising and acquiring new customers, $50B on CRM spend, and just $9B on the call centre (Ovum)? They offer new customers price incentives, free service, unlimited this and that, while often leaving existing customers on the receiving end of poor customer service – and so the churn continues.”

We’re all aware of how organizations just love us if we’re a potential customer but then ignore us -- or worse, exploit us -- if we’re an actual customer. This is often standard industry practice and it’s been this way for a long time. Why? Because marketing, advertising and sales is all about the new. It is all about crude short-term metrics such as new customer acquisition.

“It costs retail banks as much as six times more to attract a new customer than it does to retain an existing one (Ernst and Young), yet the industry refuses to focus on customer loyalty and the opportunities among its existing client base,” Pearce writes. “Instead, it spends a lot of money and effort on advertising, no-interest over-drafts, free rail-cards -- all of which results in increased incentives to consumers to change supplier.”

Your call is important to us. That’s why we’re keeping you on hold. That’s why we’re forcing you through an automated system. That’s why we’ve outsourced support.

For many years, organizations could get away with this disrespect and disloyalty to its current customers because customers were powerless. The Web gives customers power and they are wielding it.

When it comes to business, the word “loyalty” is a vastly exaggerated and delusional term. In the vast majority of situations, customers are not loyal to brands. They buy them out of habit, because they work pretty well, because the price is right, because their friends buy them. But customers are not "loyal" to most brands because most brands are not loyal to them. And the more educated and empowered customers are, the less loyal they become.

Customers don’t like change. It’s hassle. It’s time consuming. To leave your bank or phone company takes effort. You do it because you’re dissatisfied. You do it because you think the reward and effort of staying is greater than the reward and effort of leaving. Keith Pearce believes that one of the best ways to keep customers is to focus on reducing the effort they require to interact with you. That makes a lot of sense. Make things easier. Make things simpler.

And be loyal to the customer. Treat them well. I just got a call from Tesco. About an hour ago they had delivered our groceries. The caller said that one of the products they had delivered had a short use-by date and that we should have been informed of that during the delivery. Because we weren’t informed, they were going to refund us the price. We were getting the product for free.

An increasing number of organizations are behaving in a respectful manner to their customers. It’s great to see. To get respect, give respect. And loyalty should always be a two-way process.