Is Customer Loyalty Really That Important?

Customer loyalty can make or break a company in some cases, if the company is doing well and their customers are satisfied then they will keep coming back and supporting the company, however if customers are unhappy with the brand, then it can ultimately be their undoing. Customers become loyal to brands through many different factors whether it’s; emotional attachments, they’ve always used that product and don’t like change, they think one product provides more benefits than another, or the simple fact that they just like the product.

Take Fashion Nova customers for example, everyone loves their brand. They’re constantly selling out of items, they’re looked at as an affordable fashion company, their text message marketing strategies are quirky and fun which always manages to capture some kind of attention from their consumers whether its through sales or simply being talked about and gaining new consumers, the reasons are endless. However just because customers are happy with a brand, doesn’t mean that they’ll just accept whatever a brand does.

When Fashion Nova customers noticed that whenever the company had a sale, the original prices of the items were raised and then “discounted” to say that they were highly upset is an underestimate. In truth customers felt betrayed by these “fake sales”, who wants to shop with a company they feel like they can’t trust. Customers were in such an uproar that there was a class action lawsuit filed against the company on behalf of their California customers. According to Jenny Elliott at Dovel and Luner the “Fashion Nova’s products do not retail at the supposed regular prices it lists…Fashion Nova’s published regular prices are fake”. Fashion Nova mislead their customers which caused serious mistrust between the brand and their loyal customers. It’s like what the Harvard Business Review said in ‘Why Customer Loyalty Programs Can Backfire’, “when loyal members encounter service failures, they get more upset than customers who are not members of the program”.  There was so much uproar about this that it caused a lawsuit to be filled on behalf of their loyal customers who felt as though they were misled.

The allegations and lawsuits didn’t stop there, Fashion Nova even had to settle with the FTC due to allegations that they monitored the reviews on their website and blocked all negative reviews of their product. Fashion Nova constantly misleading their customers could have blown up very badly in their faces.

Luckily for the brand, they apologized and settled the lawsuits which seemed to cool their loyal customers down drastically. No one wants to support a business with their hard-earned money if they feel as though they’re being misled and lied to, what people hate even more? Is a company that does not apologize or take accountability for their actions.

Fashion Nova was able to get out of a very sticky situation without any detrimental effects to their company, while also managing to not lose all of their loyal customers due to their approach to the negative publicity. In short? They were extremely lucky to be able to turn everything around and get back on track the way that they did. Loyal customers are essential to the success of brands because without them businesses can fail. Loyal customers are the ones that contribute drastically to the success of businesses, they promote businesses through word of mouth, posting and tagging businesses on social media, and constantly supporting the brand by purchasing products regularly. It’s essential to keep loyal customers happy because without them there would be no business.