I recently enjoyed an article “Establishing Profitable Customer Loyalty for Multinational Companies in the Emerging Economies: A Conceptual Framework” by: V. Kumar, Amalesh Sharma, Riddhi Shah, and Bharath Rajan in the March issue of Journal of International Marketing. The authors capture our attention by asking why some companies succeed at going multinational while others continue to struggle. For example, despite its presence in India since 1993, Coca-Cola has yet to bypass the popularity of the local Indian drink, Thums Up. Conversely, there are success stories: McDonald’s ability to create niches in China and India.
This article has more than 20 concise findings (what to dos/what not to dos) for a company to do achieve “Profitable Customer Loyalty”. Of course, many are interesting, but one that struck a chord with me was related to “innovation”. In customer experience assessments, we often want a read on whether or not our company is perceived as “innovative”, and if it is —- does this drive Customer Loyalty? I’m not all customers think of “innovation” similarly. And more importantly, this article made me wonder if innovation is always positive.
The study highlighted in this article was a qualitative study (interviewing 42 managers of multinational companies) to glean insights that identify possible factors that drive the creation of both a profitable and loyal customer base (termed “profitable loyalty” in the study) in emerging economies. The finding related to “innovation” was “Incremental and adaptive innovations are more likely to create PCL in emerging economies than radical innovations”.
I think the message here is powerful. It’s not always a good idea to throw the baby out with the bathwater. Rather than come in with a radical innovation shaking things up, possibly innovating incrementally on an existing area is a better approach.