I recently read a whitepaper co-written by Don Peppers - www.peppersandrogersgroup.com
In it, it discusses the types of Loyalty. It describes Attitudinal Loyalty, occurring when a customer is favorably disposed to you: they like you and they trust you. The other definition of loyalty is behavioral loyalty, which is measurable by transactions: a customer is loyal if they buy repeatedly.
Of course we all want customers to be attitudinally loyal but the paper reasons that the only real business benefit of loyalty comes from behavioural loyalty.
In my opinion this is not the case. I may regularly shop at the local Tesco, but this Behavioural Loyalty is a Forced Loyalty as it is the only supermarket within easy reach . I might however on an ad-hoc basis use Waitrose..and I love the Waitrose experience so much that I recommend it to friends and family as a result of my attitudinal loyalty which results in an indirect business benefit to Waitrose.
I am surprised that Mr Peppers does not take this into account – but I am wondering if the fact that the paper was co written by Oracle’s VP of CRM Applications influenced the focus on a transactional viewpoint.