Great article about the types of loyalty you can achieve as a business. It really shows there is only one form of loyalty, because the other forms are not lasting and don't represent a sustainable business.

Purchased Loyalty

The best example of purchased loyalty is a customer rewards program. Other examples include memberships, coupons, and rebates.

Basically, purchased loyalty pays customers to be loyal, and there is nothing wrong with that practice. In many industries and market sectors the purchased loyalty strategy works extremely well.

The main problem with it is that purchased loyalty can be easily stolen because the customer is loyal to the program, not the company.

Purchased loyalty is a portion of the loyalty program, but can't be the basis for the business. Someone can always come over the top and create a richer loyalty program and forces you to squeeze your margins even more to compete.

Convenience Loyalty

The local market, the corner dry cleaner, the coffee shop on your way to work. You might be loyal to those businesses simply because they're convenient. You're likely to remain loyal unless competitors come along who are equally or even more convenient.

Location, location, location. This loyalty is a great advantage as a business, but doesn't mean the guest will be truly loyal because of it. When you have a convenience advantage, it takes a lot more for a customer to defect, but don't give your guest a reason and this advantage can be sustained for a long period of time.

Restricted Loyalty

Restricted loyalty exists when there is no other game in town. Your cable company may enjoy restricted loyalty, especially if you live in a rural setting and there is no competition. (Although it is easy to argue that other options do exist, like online services.)

Utilities tend to enjoy restricted loyalty. Most cities do not have multiple electricity providers.

Monopoly's are a wonderful thing if you find yourself in one. They make life very easy as a business. However, they rarely last for any period

of time because once someone else sees they can steal your market share, they will.

Also, businesses tend to get lazy when they have a monopoly. They don't take care of the customer and deploy strategies that are more bottom line driven, instead of customer focused.

True Loyalty

True loyalty is earned loyalty. True loyalty is undying allegiance to a brand or product based on an incredible level of satisfaction.

Customer satisfaction breeds true loyalty. When you are highly satisfied, when your needs are completely met and your expectations are consistently met and even exceeded, you simply cannot imagine using another product or service.

True loyalty is the holy grail of customer satisfaction and is something every business should aspire to create.

If you take care of your customer and provide a high level of satisfaction, you can overcome any of the other loyalty forms. Customers will travel and accept less from you than your competitors if they truly feel cared for. Always strive to build an organization around true loyalty, it's the only form of loyalty that is sustainable.