Does customer loyalty even exist?

John Sills is the author of Leadership Book of the Year 2023, The Human Experience, and is Managing Partner at The Foundation, a customer-led growth consultancy. We started working with him last year, as we embarked on our project to take a deep dive into the subject of loyalty in hospitality – even though, if you ask him customer loyalty doesn’t exist…

While customer loyalty is a hot topic in hospitality right now, I don’t believe it exists. To illustrate why I think this, here is a story about my love for Honest Burgers.

We have an Honest Burgers right opposite our office. In fact, if the fire alarm goes off, it’s our designated meeting point – we have a lot of fire drills. I loved going in there because the staff were friendly, the music was perfect, it had plants everywhere that gave a really nice feel to the place, and I had a rather specific, rather odd order.

I liked to have the plant burger – but I really like bacon, so I’d always add some of that on top, too. The vegan + meat combination could have easily been a cause for confusion. But rather than causing issues, it simply became ‘would you like the usual, sir?’ Then near Christmas, the manager of that restaurant left to go elsewhere.

And when I next went in, everything had changed. The staff were still lovely, but the music had changed. She chose the playlists, apparently. The plants were all gone – also hers, brought in from home. And when I put in my usual order, the waiter reappeared ten minutes later with a question from the chef. ‘Sir, just to check, did you really mean real bacon with that?

Loyalty is an overused term in organisations and hospitality, and it’s a dangerous one. Because if leaders believe their customers are loyal, they stop trying to impress them, focussing on winning them in the first place, then gradually taking their custom for granted.

Quite simply, if you stay more useful to your customers than the competitors and alternatives, your customers will stay with you. But if someone else becomes more useful – a better product, better price, better experience, more socially desirable brand – then they’ll go elsewhere.

The hospitality industry has a huge advantage over others in this, as a people-focussed sector and with colleagues who know that customer experience is crucial to delivering a great experience.

There are other complexities to this, of course, (the ambition of the leadership to provide excellent customer experiences, great training, a fundamental understanding of what drives your customers’ decision making, a recognition that not everything in good business must deliver an immediate ROI).

However, while I maintain that customers are not loyal to businesses, I do believe they are loyal to other people – and these can be your people, assuming you give them the correct support and tools.