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What is passive loyalty?

Passive loyalty: a short-term relationship You have to understand the difference if you want to retain your customers and increase their lifetime value to your association. An example of passive loyalty is automobile insurance. Customers stay with their existing insurance carrier because of inertia, not satisfaction.

wbtsystems.com - Active Loyalty in the Lifelong Learning Business - WBT Systems

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Your members need to continue learning if they want to remain employable, promotable, and successful. So why can’t your association be the place they always turn to for professional development? Your course evaluations show they’re satisfied with your online learning programs, but yet they stray. You know that because they’re submitting credits from competing organizations.

How can you earn their active loyalty and be the first place members turn for lifelong learning?

Loyalty in the fickle lifelong learning marketplace

Customer loyalty is a problem for every brand. Customers have choices. Another brand is always offering what they want at a better price or a more convenient time.

You could blame economic conditions. After the recession and subsequent lay-offs, you could hardly dodge headlines about the loss of employer loyalty to employees. But as it turns out, employees aren’t loyal either. MetLife’s Annual U.S. Employee Benefit Trends Study found that only 66 percent of employees plan to stay at their jobs beyond the next 12 months. Yet, the Society for Human Resource Management said that 89 percent of employees report overall job satisfaction. What’s going on here?

Satisfaction is not the same thing as loyalty. Satisfaction is a low bar. People nowadays expect satisfaction, relevance, and convenience from the brands and organizations in their life. If you want to earn their long-term loyalty, you have to deliver more than what they already expect. Otherwise, they’ll only stick with your brand or organization until something better shows up—that’s passive loyalty.

Passive loyalty: a short-term relationship

Customers exhibit two types of loyalty:

Passive loyalty based on convenience.

Active loyalty based on mutual alignment and affinity.

You have to understand the difference if you want to retain your customers and increase their lifetime value to your association. An example of passive loyalty is automobile insurance. Customers stay with their existing insurance carrier because of inertia, not satisfaction. Passively loyal customers stick with a brand due to laziness or confusion caused by an overwhelming number of options. Loyalty programs aren’t the solution: people join dozens of loyalty programs but only remain active in a handful.

How does this play out in the e-learning market?

When e-learning is merely a commodity and all offerings seem the same, customers make decisions based on price and other convenience factors. Where can I get the credits or information I need at the best price? Which class fits my schedule? Which one can I do on my phone while commuting?

Because they see e-learning as a commodity, customers are not committed, but they’ll stick with what they know until someone else makes a compelling and different offer. Discounting might get them in the door but it doesn’t breed loyalty. The money saved is a short-term benefit and won’t necessarily lead to retention.

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Active loyalty: a lifelong learning relationship

Active loyalty is based on a belief in common values. Harley Davidson elicits active loyalty in their customers. ‘Hog’ owners become part of a community of high-quality, expensive motorcycle owners sporting the brand’s clothes and tattoos. They would never consider buying another brand. They’re lifers. Every year, Brand Keys releases a Customer Loyalty Leaders List. Amazon led this year’s list. Other brands who ranked at the top were Google, Apple, Netflix, Samsung, Facebook, YouTube, Dunkin’ Donuts, Nike, and Trader Joes. Love them or hate them, their inspire loyalty. Why are consumers loyal to these brands? Robert Rose and Joe Pulizzi, hosts of the This Old Marketing podcast, talked in a recent episode about the “differentiated content tilt” or “distinct offering or distinct way they approach customers” that these brands provide. Many of these brands, like Amazon, are inquisitive about what their customers are doing (so they can identify what else to offer them) and are also “heavily into influencer marketing.” Customers connect with the brand on a personal level. Or, the brand offers them something others don't. When a customer is actively loyal, they go out of the way and will even pay more for your online learning products. They talk about and refer your courses to others. They feel good about aligning themselves and their reputation with your brand. They trust in your integrity and mission. Loyal e-learning customers are more likely to deepen their engagement with your association. “Donors who remain loyal are also much more likely to engage with the organization in other ways,” said researchers Adrian Sargeant, PhD, and Elaine Jay, PhD, in their book Building Donor Loyalty. “Long-term donors are significantly more likely than single-gift donors to offer additional gifts in response to emergency appeals, to volunteer, to upgrade their gift levels, to lobby for the organization, to actively seek out other donors on the organization’s behalf, to buy from a gift catalogue, and to promote the organization to friends and acquaintances.”

They found that such activities can increase donor lifetime value by 150 to 200 percent. Wouldn’t loyal lifelong learners provide the same benefits?

The journey from passive to active loyalty

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How can you transform new members and customers into actively loyal members and customers? First, try to identify and track the behavior of passively and actively loyal customers. You need to know whom to nurture along the path to active loyalty and whom to reward for their loyalty. Find them by talking to and surveying your customers. Even better, analyze their behavior.

How long have they been buying your educational products?

How frequently do they buy your educational products?

Do they take classes elsewhere? Where? How often?

Do they pay full-price for your products or buy at a discount?

Ask them: What do we need to do to keep your business for the next few years?

If you want to earn their active loyalty, focus on earning their confidence and trust. Help them save money. For example, when they’re checking out, suggest bundling as an option if it saves them money, don’t hide that option. Earn their trust and sales will follow. Thank them personally when they refer a new customer. Reward their efforts by giving them a discount on a future purchase. Be a reliable source of education all year-round through various channels, for example, a bi-weekly or monthly newsletter targeted to their interests, or a free webinar every now and then. Be their primary source of all kinds of education, not just the place that offers expensive conferences and online courses. Acknowledge their accomplishments. Enhance their status in the eyes of your community by providing digital badges and credentials so they can show off their achievements. “Today, emotional engagement is the predictive, real-world yardstick for loyalty, market share, and profitability,” said Robert Passikoff, Brand Keys founder and president. Let your customers know they mean the world to you. Reach out to them to discuss their experience with your programs and how you can help them advance their career or grow their business. Nobody likes to think their business is taken for granted. Make a point of reaching out to your e-learning customers to thank them and find out more about their needs and aspirations. Treat them like a member of an exclusive community of lifelong learners and they’ll reward your association with lifelong loyalty.

wbtsystems.com - Active Loyalty in the Lifelong Learning Business - WBT Systems

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