There is a huge flip side to the whole debate on technology and the drive towards customer loyalty. The fact is that many customers lose out where a business is only interested in the cr me de la cr me of the marketplace . Commercial realities often dictate that only a select few customers are given preferential treatment. In many cases businesses are happy to have unsatisfied customers and still make huge profits. Make no mistake current advances can discriminate against the least valuable customers unless a stand is taken on the grounds of moral responsibility or social compassion.
James Rosenfield, in an article entitled ˜Customer focus-pocus , says that in many cases customers are being plundered, manipulated and encouraged to move on. He also says that there is no evidence that good customer service and customer satisfaction leads to profitability. The fact is there is a lot of evidence to show that the opposite is true. This conclusion is supported by a Baum et al . study that found high performance in technology and customer satisfaction does not necessarily translate into higher profitability.
Given this evidence it is not surprising that there is a ground swell of public opinion screaming for a much better deal for customers. International groups such as J18 and movements against corporate greed and fair trade are a few examples of such lobby groups. It is early days yet, but there are some examples of businesses taking a more responsible stand, such as banks offering more choices for lower-income earners.
In the next decade moral, ethical and social issues will become vitally important in growing customer loyalty and succeeding in all forms of business. If the purpose of your business is solely profits, you will need to take a radically different approach and incorporate a more compassionate and caring community-focused perspective if you are going to grow competitive advantage in the long term .
It is not for me to say how to live your life or run your business, that choice is yours. However, I do think that the tension between improving customer loyalty and business success cannot be ignored. Customer loyalty can go hand in hand with a more enlightened stand where excellence also means good ethical conduct and social responsibility.
What is making the transition difficult, particularly in the corporate world, is that senior executives are constantly being rewarded to cut costs and increase shareholder price at the expense of customer service, employee well-being and better learning.