Customer Loyalty Is Overrated

This article draws on modern behavioral research to offer a theory about what makes competitive advantage last. This article argues that performance is sustained not by offering customers the perfect choice but by offering them the easy one. So even if a value proposition is what first attracted the...

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Bibliographic Details
Published in:Harvard business review 2017-01, p.1
Main Authors: Lafley, AG, Martin, Roger L
Format: Magazinearticle
Language:English
Subjects:
Brand loyalty
Competition
Competitive advantage
Customer retention
Customer services
Customers
Guidelines
Market positioning
Target markets
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Summary:This article draws on modern behavioral research to offer a theory about what makes competitive advantage last. This article argues that performance is sustained not by offering customers the perfect choice but by offering them the easy one. So even if a value proposition is what first attracted them, it is not necessarily what keeps them coming. In this alternative worldview, holding on to customers is not a matter of continually adapting to changing needs in order to remain the rational or emotional best fit. It's about helping customers avoid having to make yet another choice. To do that, you have to create what this article calls cumulative advantage. The conventional wisdom about competitive advantage is that successful companies pick a position, target a set of consumers, and configure activities to serve them better. The goal is to make customers repeat their purchases by matching the value proposition to their needs. By fending off competitors through ever-evolving uniqueness and personalization, the company can achieve sustainable competitive advantage. Here are four basic rules to follow: 1. Become popular early. 2. Design for habit. 3. Innovate inside the brand. 4. Keep communication simple.
ISSN:0017-8012