Customer loyalty and trust 38 

Once the brand image has been created and a customer has used the product or service for the first time, a defining question is how important is customer loyalty to the organisation? This is a question that only the organisation can answer. The marketer has ensured that the customer first walks through the door and this is only half the battle won for the organisation.

Customers are fickle and their loyalty only lasts as long as they are satisfied. When something better comes along, they switch to the competition without giving it a second thought. Loyal customers are different all together; they don’t just use the product or service again themselves, or recommend it to someone, they insist that their friends also become consumers of the product or service (Bell and Patterson, 2007).

Court et al. (2009) explain that not all loyalty is the same in today’s competitive environment and that there are possibly two types of loyalists:

 Active loyalists – these are consumers who not only stay with a brand, but also recommend it to people they know (Court et al., 2009). This type of loyalist is defined by Bell and Patterson (2007) as a “passionate customer” who has the ability to give a brand competitive advantage;

 Passive loyalists – these are consumers who stay with a brand without being committed to it. The consumer could not be motivated to go through the funnel process once again and buys a brand out of familiarity (Court et al., 2009).

What is important for an organisation to remember is that loyalty can be likened to motivation, meaning that loyalty can only be created only with the permission

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of the consumer. It cannot be forced or coerced. Forced loyalty exploits, created loyalty excites (Bell and Patterson, 2007).

In order to further understand the principle of loyalty, one needs to consider the sociology of loyalty. Kemper (1984) as cited in Conner (2007) links variations in the social environment with varying emotions. Kemper argues that emotions are guided by three principles: reciprocity, prior structural effects and devolution:

 Reciprocity implies that if person A does something for person B, then person B is likely to return the favour. However Kemper points out that reciprocity also works in the negative sense (Kemper, 1984 as cited in Conner, 2007);

 Prior structural effect is explained as the reaction to new emotional stimuli based on prior experience. Thus if a person’s experience of loyalty is negative, they are more likely to take a negative approach to forming new loyalty relationships (Kemper, 1984 as cited in Conner, 2007);

 Devolution refers to the likelihood that emotional interactions that start well, will decline in efficacy and positive effects as the interactions continue (Kemper, 1984 as cited in Conner, 2007).

Loyalty must then have a starting point and it takes time to develop. The development starts from either trust or mistrust in the product and brand. If a positive experience and trust is gained the task focuses on building the trust to a position of loyalty, however if the experience is negative the results is mistrust that may never be regained. Covey and Merrill (2006) explain that if a consumer’s trust is violated, the likelihood of a second chance is slim and that this decision is solely up to the consumer. This is especially true if the violation is a character violation such as integrity or failure to deliver on a promise, which leaves the consumer with feelings of betrayal.

A recent example of an organisation regaining trust from its consumers is the Toyota recall of 2010. Despite the recall problems experienced by Toyota, the organisations historic brand strength was a great asset during this difficult time,

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and still remains one of the highest valued car brands according to Millward Brown (2010). Toyota’s recovery from the recall drama is underscored by the importance of transparency to the consumers, where the disappointment resounded quickly beyond the dinner table (Brands and Branding, 2010).

Covey and Merrill (2006) do however go on to explain how service recovery can restore trust and even become the catalyst for a greater trust relationship and long term loyalty. So trust can be restored, but it will come at a cost and take effort. Cost and effort that could have been spared had the job had just been done right the first time.

Given these challenges, it is becoming increasingly difficult to retain the consumer trust. Why? The brand, and the organisation it is associated to, must become trustworthy in the eyes of the consumer, which means it takes more than the marketer telling the consumer “trust us” (Urban, 2003). Covey and Merrill (2006) explain that market trust is all about brand reputation. It’s the feeling the consumer has that makes them want to buy your product or service.

Urban (2003) further explains that the power has shifted to the consumer in the trust relationship. This is because consumers now have tools that inform them of the “true state of affairs”, while enabling them to see part the pushy messages from marketers. This enables consumers to make their own decisions when determining what they want to buy. Urban summarises the following trends that allow for increasing consumer power that are motivating organisations to become more trustworthy:

 Increased access to information – consumers now have greater access to independent information about products and services. This includes opinion websites and internet research websites;

 Increased alternatives – the internet has reduced the search costs for consumers to find alternative products, changing the dynamic within the decision journey;

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 Simplified transactions – the buying of goods and services has become easier with current technologies. These technologies also transcend geographic barriers;

 Increased communication among consumers – modern technologies allow for consumers to consult and collaborate with one another.

This explanation from Urban (2003) confirms that loyalty is formulated from the basis of experience, but it need not be the consumer’s own experience in the product. The consumer will seek out the information summarised above as part of their decision journey.