CEO Forum Insights: Building Loyalty When Handshakes Are Digital

Feb  27 
Chris Thompson  Senior Writer, Fiserv 

Author, researcher James Kane outlines the importance of safer, easier, better

Every organization values repeat customers, good reviews and the knowledge that they're meeting consumer expectations. But the gold standard in any relationship is loyalty.

So what is loyalty, really? And how do organizations engage with people in a way that creates and maintains it?

James Kane, a behavioral scientist, loyalty expert and author of the book, "The Loyalty Switch," has spent much of his career trying to answer those questions. He spoke to a select group of CEOs at Fiserv Forum about how loyalty, in both customers and employees, is based on how well organizations answer three hardwired questions: Do you make me safer? Do you make my life easier? Do you make my life better?

We asked Kane to expand on his Forum discussion and explore how financial institutions can demonstrate that the answer to each of those questions is "yes."

The following conversation has been edited for length and clarity.

Financial institutions can show they make people's lives safer and easier. But how do they answer the question of whether they make people's lives better?

I think there's a misunderstanding of what 'better' actually means and why humans seek out opportunities to make life more fulfilling.

'Safer' and 'easier' are pretty straightforward concepts. If organizations can protect me, my money and my reputation while also saving me time and effort, then of course I want to associate myself with them. Those preferences don't just apply to humans. Every life form has evolved to maximize its security and optimize its energy. That's chemistry, biology and physics 101.

But we have convinced ourselves that the influence of those hard sciences ends with 'safer' and 'easier.' 'Better,' we believe, is some romantic ideal limited to our remarkable species, dreamed up by philosophers in ancient Greece or poets in the Middle Ages. It isn't.

Seeking a better, more fulfilling, purpose-filled life is also a product of the biology and chemistry that built us and the physics that governs us. All those life forms that surround us don't just work to stay alive (safer) and limit the energy they use (easier). They also look for opportunities to grow and flourish (better).

So how does a financial institution do that? How does it help customers, vendors, strategic partners and employees grow, develop and flourish? For some, it's as simple as the financial institution helping them make more money. Can my bank do that for me better than some other entity? If so, I will be loyal. If not, I need to keep my options open.

For employees, having a job and a paycheck keeps them safe. Giving them a computer and a comfortable place to work makes their life easier. But if you don't give them opportunities, don't invest in their training and development, don't create a culture that allows them to pursue some greater goals, you will understand that loyalty is about more than making one's life safer and easier.

If you really want people to have loyalty toward you, you have to build relationships with them.

There's often an assumption that loyalty derives from person-to-person interactions. Can loyalty grow from technology and virtual interactions?

Here's the anthropological answer to that: The brain is about 200,000 years old. The technology we're talking about is less than 20 years old. The brain wasn't built for the things it's encountering. It was built for personal interactions, which means what it looks for in the virtual world is the same kind of interaction that would tell it who it can trust, who it should fear and where is an opportunity.

If you think about it in a personal way, it will make perfect sense as to where the danger is. We just met. Now imagine if, after we said hello, I started asking you a series of questions that got more personal as we went. And then, before you even know who I am, I start trying to sell you something.

If someone ever did that to you, you would run away. Yet that's what technology does to us all the time.

Financial institutions should understand that relationships take time and resources, just like in your personal life. If you really want people to have loyalty toward you, you have to build relationships with them.

How can financial institutions build loyalty across generations?

Culture is the difference between generations, but the way our brains look at relationships is exactly the same. What a 20-year-old needs is exactly the same as what a 60-year-old needs: 'Does this organization keep me safe? Will it make my life easier? And will it make my life better?'

Now, how those things get defined for a 20-year-old versus a 60-year-old are different. With millennials, they have a different way of thinking about things, but only because organizations have caused them to think about things differently.

If I am 24 years old today, here's my situation: I graduated from college and am $250,000 in debt. I got a job that's not paying me all that much. And every time I read anything about the industry, I see we're going to replace jobs with machines. Where's my security? Where's the investment in me? When do I feel like maybe my grandfather did when he worked for IBM for 40 years because the day he arrived, he went to training for three weeks?

The organization might hire a bunch of 24-year-olds, but they realize they can't afford to pay off their student debt or even live in this city. They don't feel secure in the job and doubt they'll get a promotion because technology will replace them. They see the organization won't even build a culture around them. So they leave.

Well, the organization looks at that and says, 'All these 20-some-year-olds just keep leaving. They're not loyal at all.' The organization feels it bears no responsibility when it bears complete responsibility.

Loyalty is not a selfless emotion. No one is devoted to you because they want to be or because they feel they owe you. They're loyal because it is in their best interest.

That puts the burden on the person who's delivering safer, easier and better. It shouldn't be an expectation that our employees will remain loyal to us just because we send them a paycheck.

With generations, there are definitely cultural differences. There are experiences that cause some people to live their life differently than another group. But what they need satisfied is exactly the same.

The work comes in trying to understand what safer, easier and better actually mean for every customer.

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