The traditional concepts of loyalty and sacrifice may be too blunt for businesses operating in the digital age to leverage benefit from customers. Raghu Kale embarks on a journey to lucidly hammer out new definitions of the age-old and sacred trait of loyalty and shows how the resultant understanding could be applied to the modern world dominated by big data, artificial intelligence and social media.
Sacrifice is the kernel around which loyalty is wrapped, Kale posits at the beginning of the book. He then expounds that while repeat customers may be a traditional way of measuring loyalty of customers towards an organisation, these relationships often hide sacrifices made by the parties in the relationship, which is based on shared vision
"It is not just about what a customer gains from a transaction that determines their relationship with a product or service but is rather an equation of what or how much the customer is willing to accommodate, forgo, accept, and tolerate, for them," the author writes.
While it’s easy to understand the concepts of loyalty and sacrifice in the context of soldiers, parents and even teachers or mentors, it is not so easily manifested in the relationship between an organisation and employees or between a product and its customer. The author, however, manages to dissect these facets to reveal the underlying dynamic of loyalty and sacrifice. He also proposes a unified framework for comprehending the concepts, which makes it easier to quantify them and establish correlations.
After having established the context, the author proposes a framework for unified definition of loyalty with four principles that holistically encompass customer and employee loyalty. The first element of the definition is "The L&S Elusive Principle". It is explained as the following: in the real world a customer is presented with a plethora of choices.
At times, hidden in these choices are compromises - instances when the customer is ready to make a sacrifice or overlook lapses in the face of better options. The more sacrifices the customer is willing to make, the greater their loyalty.
Further, "The L&S Wallet Principle" explains that customers don't mind paying a premium for a product in lieu of what the brand and people behind it have consistently provided. This kind of sacrifice is measurable and is often sighted in the price inelasticity around certain brands. "Cult brands have perfected the art of extracting the share of wallet that could induce sacrifice beyond the marketers’ line of sight," the author says.
The third definition of customer loyalty and sacrifice is a function of the organisations' ability to orient their employees to go above and beyond their normal line of duty. "The L&S Passion Principle" is driven by the innate affinity employees have towards the brand, which percolates into how customers develop brand affinity.
Although the author generously sprinkles the book with anecdotes to drive home his point, the one about how a pizza store manager intervenes to save the life of one of its regular customers is particularly forceful and effective in illustrating that loyalty and sacrifice are often derived from passion involved in the relationship.
The fourth principle of ‘silence’ talks about this characteristic of loyalty epitomised in discreet self-sacrifice for a larger cause. An alignment of values and vision propels such acts to create a higher value for the shareholder.