Is Loyalty at Risk?

In this era of always-on marketing, customers are showing signs of fatigue. The multitasking digital lifestyle, constant media distraction in the home and workplace, and the hypercompetitive marketer's pursuit for customers' time and attention have driven valuable customers to tune out. Terms like cognitive overload, email attention deficit disorder, and data smog have filled the press lately. Marketing effectiveness is diminishing as a result. But that's not the worst of it. This tempest is shaking loyalty from its foundations. As a customer strategy, loyalty programs run the risk of losing effectiveness because companies can't get their messages through the marketing storm. When they do, customers often don't pay attention to them. Consequently, the approach to customer loyalty has to change. Here's how.

"The human brain is an 'anticipation machine,' and 'making future,' is the most important thing it does…. Wonderful things are especially wonderful the first time they happen, but their wonderfulness wanes with repetition."

That quote is from Harvard professor Daniel Gilbert's award-winning book Stumbling on Happiness. This quirk of human nature has ramifications for customer loyalty. The "anticipation machine" that runs our brain has become overfueled by the deluge of marketing messages, a proliferation of product choices, and ever-expanding channels to buy them from. Our society has become efficient at pushing "the psychology of next" and even better at downgrading the "next big thing."

Consider the iPhone. Within 30 hours of its release many of the more than 270,000 people who purchased it had switched from their current, working mobile handset and cancelled current service contracts (likely at a cost), all to get their hands on "next." Despite its innovations and media frenzy, the iPhone was doomed to quickly drop from "next" to "new." The New York Times noted: "Even before a single iPhone was sold it felt like we'd lived through an entire product lifecycle." And Marian Salzman, CMO at ad agency JWT, was quoted as saying "About 45 minutes after it debuted people were waiting for the 2.0 version."

If consumers are continually focused on "next," marketers may in turn suffer from a dearth of attention to their communications on "now," which could lead to a lack of customer knowledge and therefore a loosening grip on what makes customers happy.

Also contributing to customers' distraction is the culture of multitasking, which discourages attention. Sixty-five percent of respondents to a study from the University of California at Irvine consistently talk on their cell phones while they drive. Kids talk on cell phones while they IM, and do all this while they watch TV with 90 percent of the screen, a crawler at the bottom, and promotional messages flashing in the corners.

"Attention," says Umair Haque, a strategy consultant with Bubblegeneration, "is becoming the scarcest—and so most strategically vital—resource in the value chain. Attention scarcity is fundamentally reshaping the economics of most industries."