Positioning for the active customer.

Have you been confusing laziness with loyalty?

A couple of weeks back I wrote how, from early Spring, we can expect most domestic markets to start bouncing back, some with near-explosive growth. But despite all that growth, some businesses will still have an incredibly tough year. Why? Because of two certainties.

In a letter of 1789, Benjamin Franklin famously wrote, “In this world nothing can be said to be certain, except death and taxes.” Indeed, as if to reinforce Franklin’s point, we can’t even be certain that he came up with those words himself, as they’re virtually identical to a line in Christopher Bullock’s English farce, The Cobbler of Preston, written over 70 years earlier, and which itself is a rip-off of Shakespeare.

So, in a world where everything from vaccines to Brexit, and yes, even tax rates, seem so uncertain, what can we say about 2021 with any certainty? Well, if history is anything to go by, we can say this: the strength of your loyalty and distinctiveness of your proposition will define your success. (OK, not as catchy as Franklin, but he clearly had help from his mates)

The reason for both of those key factors of success, is that recessions stop people being lazy.

Most businesses have two kinds of customer: lazy and active. Lazy customers don’t make active purchasing decisions, they default to the easiest, the usual, the habitual. Most of us are lazy customers for most things – we shop at the same supermarkets, keep the same energy and utility providers for years, and we rarely, if ever, revisit a subscription once its running.

The biggest mistake most businesses make, is thinking their lazy customers are loyal. They aren’t. They just can’t be bothered to look elsewhere.

In good times, we all get lazier. In fact, Amazon’s remarkable growth over the last two decades has been largely built on cultivating and leveraging customer laziness, from Prime subscription, to one-click buying, to dash buttons on the fridge. But lazy customers are only lazy for as long as they can afford not to care, and recessions can shake that foundation pretty hard.

In retail, during the last recession and throughout the subsequent recovery, Aldi and Lidl saw a massive boost in custom, but so did M&S and Waitrose at the other end of the same market. Meanwhile, the big three in the middle saw their shares crash, as many of their previously lazy customers became activated by circumstance, switching from one big weekly shop to making much more discerning, proactive choices about what to get from where.

The winners won because they stood out. They invested in the loyalty of their own customers into the downturn and went after the lazy customers of their competitors through the recovery. The losers lost because they confused laziness and loyalty. It really is that simple. And that’s exactly where we will be in 2021.

The winners will be those who’ve consciously invested in their offer through the recession to build their own loyalty and are now upping the ante on the competition. Those are the ones standing out from the crowd, with a sharp and distinctive appeal to the no-longer lazy customers emerging from lockdown more discerning, more choosy, and far more active than before.

So, with just three or four months left until recovery takes off. How loyal are your customers, and how lazy are those of your competition? How sharp and distinctive is your proposition? And how strongly are you positioned to actively scoop up their share in the New Year?