Customer Loyalty is Disappearing as Fast as the Fortune 500
There have been numerous quotes about the fate of Fortune 500 companies and their disappearing lifespan. In fact, Peggy Noonan wrote an article on Forbes about it in 2011 stating:
Fifty years ago, “milking the cash cow” could go on for many decades. What’s different today is that globalization and the shift in power in the marketplace from buyer to seller is dramatically shortening the life expectancy of firms that are merely milking their cash cows. Half a century ago, the life expectancy of a firm in the Fortune 500 was around 75 years. Now it’s less than 15 years and declining even further.
But this raises an interesting set of questions, not about the life expectancy of a business but the half-life of customer loyalty.
Why should a customer pledge allegiance to the corporate flag when it’s no longer building a relationship for life ?
If you look at how startups are currently being built there is a large number already designed with an exit strategy in mind, they want to be bought within 3-5 years and your loyalty will go along with it.
Why are companies wasting time building expensive loyalty programs when a customer’s attention span is as short as their business lifespan ?
If the figures and trends are still holding true from 2011 companies are spending vast amounts of money to pull the wool over a consumer’s eyes for that short term gain. This isn’t true of every company out there but you have to question why some are so focused on consumer and brand loyalty when they are already planning their escape. And it boils down to that all important valuation, how many customers they have and how much information they hold. But watch out, because consumers are no longer the Neanderthal’s of yesterday and they know you’re disappearing and taking their loyalty with it.
Loyalty is no longer 4 score and 7 years long, it’s more like 4 minutes and 7 seconds now.
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