Is Uber a proof that customer loyalty still exists?

Is customer loyalty a thing of the past in the digital age?

When I started Marketing, the pursuit of loyalty was everything. Loyal customers were the key to profitable business, with everyone taught at birth that the cost of acquiring a new customer was by some multiple considerably harder than keeping the ones you already have.

Customer research often talked to “lapsed” purchasers in an often vain attempt to work out why they’d left. One magazine publisher would personally call anyone who cancelled their subscription to find out why. The feedback he got was better than any Focus Group’s. He'd usually follow up the call on whatever it was the lapsed purchaser had raised as issue. And more often than not, the customer renewed their subscription after taking his call.

Al Ries, author of the 22 Immutable Laws of Marketing defined 'brand' as a “promise of consistency”, with the implicit guarantee that if marketing teams followed the rules of successful brand management, they'd naturally creat armies of fiercely loyal customers ignoring competitive offers and staying loyal to the “brand”.

Get the brand right and then set about delighting and surprising your customers and watch the money roll in. Then slowly implement premium pricing. That was pretty much the business model for a long time in the business.

So what changed, apart from everything?

The first driver of change was probably the emergence of abundant choice. With so much manufacturing now emanating from the same regions and with everybody using the same software to design products, in most growing markets nowadays we’re overwhelmed by unparalleled choice.

Big name brands have to be really special to stay ahead of copycat and “own” labels. In the world of high-end electronics for example, Apple seem really good at it; Sony, not so much.  

But if you’re buying something more basic, like a kettle, where the only key performance metric is the ability to boil water, it's increasingly a war on pricing. Retail giants Shoprite, Target and KMart have revived struggling businesses as increasingly vibrant retail offerings by selling a range of nice enough, no name kettles that are competent at boiling water; for a quarter of the cost of the big names.

And that’s a pointer towards the second big change. Everything’s good nowadays. There was a time when buying ‘foreign’ music was the thing. Today, that comes second to downloading Nigerian music or music from Nigerian stars.

‘Rust’ used to be a prime consideration when buying a second hand, now, in-car Bluetooth and reversing cameras are in; and you can’t fail to see how much the world has changed.

But undeniably the biggest thing that’s changed is that we now all have so much free access to global information.

And that access to information means we get to hear about good new things quicker than ever, with no inhibitions of geography or language; bringing us back to the success of Uber.

Uber decides which town to launch in next, by looking at where people worldwide have downloaded their app. With their publicity machine generating positive stories across worldwide media, Uber has noticed that people download the app even if Uber isn't in their town yet, or their country for that matter.

And when Uber spots that a heap of people in a new market have downloaded the app, they've painlessly created a readymade market of potential customers just waiting for them to launch.

For those of us brought up with the notion of spotting "buying signals", downloading Uber's app is more akin to an offer of marriage. In marketing terms, it’s the ultimate virtuous circle and as close as we''ll get to a digital version of what we used to call word of mouth. Perfect!

Until, of course, a competitor comes along. In the language of old school marketing, Uber's decision to take on the taxi industry, worldwide, was a Big, Hairy and Audacious Goal. That they pulled it off will no doubt be the subject of marketing texts for years to come. 

Almost every week I see an article about the Uberisation of something or other. Some may even talk of how Uber users are so loyal, that they no longer use the word taxi. It's like Hoover, or Levi's.

Until of course that competitor comes along, Uber is a terrific brand. It's trusted and consistent across barriers of language and culture. It's supporting a revolution in the way people work and represents something that people want to belong to. 

They've already achieved what most marketers can only dream of. Yet the biggest marketing issue for Uber is the same as any other business winning (or struggling to keep afloat) in the digital age and that's the notion of customer loyalty.

And with news arriving of new pretenders to Uber's throne, the true test of Uber’s customer loyalty will be the arrival of a shiny new competitor who understands the customer even better, especially if it’s cheaper.

Previously loyal Uber customers will weigh up the new product offering and if it ticks a box of "better" and there's no great price difference or other barrier to purchase, they'll probably give it a go. And if it's also significantly cheaper, well...

Alun Probert is a marketer, writer, Strategy and Marketing expert, passionate about helping people do things better.

Edited by ‘Dele Dele-Olukoju, Marketing Communication strategist and publisher of the online Marketing Communication Digest. He writes from Lagos, Nigeria.