6 Industries with Low Customer Loyalty

Written by Ricky Nave in Markets

1. Gas stations

Most people won’t go out of their way to go to a particular gas station if there is a closer, more convenient gas station. In fact, most people won’t even turn around to go to a gas station on the other side of the road if there is one on this side of the road. Gas franchises like Shell have tried to fight this by introducing loyalty programs and advertising their “superior” additives, and those work for a very small subset of customers, but the majority of most customers will still choose a gas station based on (1) convenience / location, (2) how spacious / clean / nice the gas station looks, and possibly also (3) any restaurants that the gas station may have inside it.

2. Airlines

Most people choose flights based on cost (including the cost of baggage). Some may also consider flexibility (i.e. the ability to cancel or reschedule without a fee). And tall people are likely to consider leg room. However, almost no one cares about the actual airline they purchase a ticket with, unless it is for one of the three reasons just mentioned.

3. Car rentals

Most people book car rentals through a third-party website (either an airline website or a search engine aggregator like Kayak.com or Hotels.com). Typically, the decision will be based on (1) price and (2) the type of car. The company renting the car doesn’t really matter to consumers.

4. Home internet service

Not many people love their internet service provider. And most people don’t even have many options. If they did have options, they would probably choose to change away from Comcast.

5. Credit cards

People choose credit cards based on opportunity (e.g. which company offers it to them), what they can qualify for, what benefits the card offers, and what fees the card has. Not many people choose cards specifically because it is offered by American Airlines or Bank of America.

6. TVs

As I write this article, I had to glance over to see what brand of TV is mounted on my wall. That should tell you all you need to know about customer loyalty in the TV manufacturing industry.

Ricky Nave

In college, Ricky studied physics & math, won a prestigious research competition hosted by Oak Ridge National Laboratory, started several small businesses including an energy chewing gum business and a computer repair business, and graduated with a thesis in algebraic topology. After graduating, Ricky attended grad school at Duke University in the mathematics PhD program where he worked on quantum algorithms & non-Euclidean geometry models for flexible proteins. He also worked in cybersecurity at Los Alamos during this time before eventually dropping out of grad school to join a startup working on formal semantic modeling for legal documents. Finally, he left that startup to start his own in the finance & crypto space. Now, he helps entrepreneurs pay less capital gains tax.

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