Monday, March 27, 2006

The Fickle Feline – or Customer Loyalty In the Internet Age

Preparing breakfast one morning, you hear some mewing on your porch and discover a cute, hungry kitten. You don’t know where she’s been or why she showed up at your house, but you’re a kind soul and you pour her a saucer of milk. Bravo!

A few days later the cat returns, and soon enough she appears like clockwork to lap up your offering. What a loyal kitty!

Unbeknownst to you, however, in that parallel world where cats spend most of their lives unseen by humans, this kitten gets web access. Eventually she finds her way to [this address doesn't really exist, obviously - Ed], where she learns that the retired lady down the street offers warm milk and a pleasant scratch behind the ears at no extra charge.

These puss ‘n boots are made for walkin’, and you, kind soul, never see the kitty again.

Did the fickle feline stop being loyal? No, the clever cat stopped being ignorant. Access to information allowed her to determine that your neighbor could better address her needs.

The kitty’s so-called loyalty to you depended upon a poverty of information about the alternatives. (Combined with not a little bit of fear: She could have tried the other porch any time – but what if they had a dog?)

Application of this allegory to the travel business in general: Same thing, but with fewer hairballs.

There appears to be a widespread belief that the Internet undermines, erodes – or just destroys – customer loyalty. By providing 24/7 access to a virtually infinite universe of information about destinations, travel product providers, and prices, the Internet all but seduces loyal customers to investigate alternatives.

But: As the tale of the cat shows, genuine loyalty can’t be founded on an absence of information. And it follows that it can’t be threatened by an abundance of information. On the contrary: real loyalty assumes that the customer is informed about the options and then chooses (and continues to choose) a particular product.

(Yes, Web travel research is often motivated by price. But a travel consumer that is driven exclusively by the cost of the product is by definition never going to be loyal.)

So the popular opinion has it precisely backwards: The Internet doesn’t threaten customer loyalty – although it might release repeat customers that were bound to you out of ignorance or fear. On the contrary, the wealth of information about options and alternatives easily available on the web in effect makes genuine customer loyalty possible for the first time.

Of course, getting the right information to the right prospect remains a major challenge for providers – and the topic of a separate Blog entry.

Tim Walters, director international marketing and strategy, FatWire Software

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