I just read an article in Advertising Age called Marketers Put Emphasis on Loyalty which talks about how companies are focusing on loyalty programs during the economic downturn. According to Adam Burke, Hilton Hotel’s senior VP-customer loyalty:
Like a lot of people in the [hospitality] industry, we’re starting to see some slowing. Our Honors members tend to be the group that buoys us through a downturn. They are the core audience and tend to stay loyal and sustain the business especially through those downturns.
That dynamic is true in other industries; loyal customers really help in a downturn. So is loyalty more important in a downturn? Absolutely not! Loyalty is ALWAYS important.
Let’s consider a simple loyalty lifecycle: (1) Engage customers, (2) build loyalty, (3) reinforce loyal activities. Downturns are the worst time for (1) and (2) because there are fewer customers. It’s the time to really hone in on (3). So if you just start thinking about loyalty during a downturn, it’s too late.
The bottom line: Loyalty is an asset that you build up when you need it the least.