Customer loyalty is an illusion – and brands are learning that the hard way
Tesco and Marks and Spencer both announced poor results last week. The stock market reacted accordingly: Tesco shares rose, M&S shares fell.
Why the difference? Because Tesco immediately announced dramatic cuts, closing stores and selling off its data business. All of which sounded dynamic and convincing. Whereas M&S is a lot further down the slippery slope, and it has made so many announcements about what it's going to do about it that nobody finds it convincing any more.
And what does this most recent news tell us about customer loyalty?
M&S has struggled to win back previously devoted customers
Marks and Spencer was once the most beloved retailer in Middle England. And then suddenly, it wasn't. In the blinking of an eye, everyone fell out of love, because M&S let us all down over the quality of its products. It has have never regained its former position in everyone's affections.
You have to ask yourself, was the love people once felt for M&S loyalty? Isn't the test of loyalty that it endures, through thick and thin? Isn't loyalty defined when things are at their worst, and yet you stand by your man/woman? Or brand?
Loyalty is what holds political parties together even when the electorate kicks them out of power. It's what makes soldiers endure appalling conditions and dangers, and face death daily. It is most valuable in adversity. But in marketing, it doesn't exist.
If it did, M&S customers would have continued to shop there, waiting for the company to sort itself out. But that didn't happen. When things got sticky, the customers bailed out.
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If customers were loyal, the British motor industry that gave us the Morris Minor and the original Mini would still be with us. But they went on to give us the Morris Marina and the Austin Allegro, and now the factories that made them are owned by BMW and the Shanghai Automotive Industry Corporation.
Forget loyalty. What does exist, at times, is a fierce affection for brands. But it's fickle, clearly. It lasts exactly as long as the brand in question keeps doing the thing its customers love. The minute it stops, it's over.
If loyalty in any way enters into this, it's from the brand to the customer. What's required is for the brand to show it cares by continuing to do – or go back to doing – the things the customers love. Even if the customer goes away for a bit. The brand must not falter, but keep trying. Try even harder. And maybe win the customer back.
The question is, can Tesco manage what M&S so far have failed to do? Can it make its customers fall back in love with it?
Tesco's Clubcard was, in its day, revolutionary. But not any more. And knowing everything about your customers, as Tesco claims to do, is not the same as showing you appreciate them. Even the rewards you hand them won't do that if the emotions aren't engaged.
It's hard to love a messy, grubby supermarket, where the service is poor and the prices aren't especially good. It's hard to feel loved in such a place. Points and rewards won't make up for it. They come at the wrong time. If you don't enjoy being in Tesco, while you're actually in it, getting an incentive to go back there later on, when you're in the comfort of your home, won't help.
If they want to reward their customers, they'd be better off doing it in store. If Tesco sells off its data business, as it says it will, and spends the money on making its shops nicer places to go, with keener prices, and no horse meat in the burgers and Bolognese, it might be able to win back its customers' love.
It won't be easy. Marks and Spencer has been trying for years, without success. When you're in love, you'll forgive a lot, but when love dies, you'll forgive nothing. Watching M&S announce new, supposedly fashionable lines was once mildly amusing – it was an allowable eccentricity. Now it's plain embarrassing, like a paunchy, middle-aged drunk on the dancefloor pursuing a young woman half his age. You just want it to stop.
Tesco hasn't reached that stage of desperation yet, and maybe the medicine it is swallowing now will rejuvenate it. The share price has gone up. Perhaps Warren Buffett will change his mind. He sold his shares a while ago, and said buying them had been a huge mistake.
'Tesco proves Buffett wrong' would be an interesting headline. Would you bet on reading it any time soon?
Paul Kitcatt is chief creative officer of Kitcatt Nohr