For most businesses, few things are more valuable than a loyal customer.

Fortunately, thanks to technology and the internet, there have never been so many
options for businesses looking to build long-term relationships with their customers. And
these options are growing by the day. Customer loyalty solutions, for
instance, look like they’ll be playing a big role in the emerging
market for location-based services.

But despite how important customer loyalty is, there a lot of myths
about it floating around, and a lot of investment made with the goal of
increasing customer loyalty is wasted because of them. Here are five
harsh truths about customer loyalty that every business should keep in

Many businesses don’t know who their loyal customers are

For all the
talk about customer loyalty, a significant number of businesses have
nothing in place to accurately track and identify repeat customers. For
obvious reasons, that’s a problem.

You usually can’t discount your way to loyalty

How do you acquire
loyal customers? Looking around today, one might get the impression
that deals are a pretty good technique. While they’re easy, and
there is a place for them, deals aren’t a sure bet when it comes to
creating loyalty. It is often particularly difficult to develop
customer loyalty when discounts are provided up front to acquire new

After all, enticing customers to come back by constantly
offering a deal that’s too good to ignore is really no different than lowering your prices — sometimes unsustainably.
Additionally, it should be noted that your most loyal customers may
very well value intangible rewards far more than they value than tangible rewards, like discounts, that are far from ‘exclusive’.

Not every customer can be turned into a loyal customer

 Plenty of
customers, for many legitimate reasons, will never become ‘loyal‘.
Some, for instance, may be price-sensitive bargain hunters. Despite the
fact that loyal customers can’t be found under every rock, a lot of
money is spent on loyalty programs that not-so-strategically try to
turn everyone into a loyal customer.

You can’t take loyal customers for granted

Most businesses love loyal
customers. After all, customer acquisition can be difficult and very
costly, and a reliable base of loyal customers can reduce the pressures that come from needing to constantly engage in efforts to acquire new customers.

But keeping customers loyal isn’t always a walk in the park
either. Growing and maintaining a loyal customer base usually requires
a decent investment in, and appropriate use of, CRM. Without it, you
may create the worst type of customer: the former customer who you gave
good reason never to come back.

Loyalty doesn’t always equal profitability

Just because a particular
customer is a ‘regular‘ doesn’t necessarily mean that he or she is
profitable. At the end of the day, loyal customers are great, but it’s
the profitable customers who keep the lights on. Identifying loyal,
profitable customers and making sure that they remain loyal and
profitable is really what ‘customer loyalty‘ is really all about.