We can all think of a brand or product that we are loyal to, but can you think of a service that evokes the same feelings?

Creating customer loyalty is undoubtedly an integral part of remaining competitive. Few businesses, if any, can survive without establishing a loyal customer base. In fact, the importance of customer loyalty was highlighted in a recent study which found that it can cost up to 5 times more to attract new customers than to retain your current ones.

This presents a particular challenge for the service industry. Services are unique in that they are intangible and therefore, it is particularly difficult for customers to assess the value of the service. Marketers then face the difficult task of trying to communicate the value of something which cannot be seen or touched. Further to this, if the service provider succeeds in meeting or surpassing the customer's needs during one encounter, can it be ensured that they will continually meet the customer's expectations in future encounters? This becomes especially challenging when the human aspect is thrown into the mix - a service provider having a bad day can evoke negative emotions in the customer and encourage them to assess alternative options. With all these things considered, doesn't it become apparent how difficult it is to create loyalty when a service is the product on offer?

Let's take a look at Apple. Apple has arguably the most loyal customers in the world, with some 84% of iPhone users saying they will choose an iPhone when replacing their device. Apple followers report that their loyalty to Apple stems from two things - the product portfolio and the emotional connection with the brand. The Apple portfolio, which encompasses everything from iTunes, to MacBooks, to iPads and iPhones, is no doubt impressive. However, it is one thing to put out a great device - the real challenge lies in ensuring that a product integrates effortlessly into a customer's life. Apple achieves this seamlessly. These powerful products coupled with the consumer's relationship with the brand places apple at the top of the loyalty stakes. But is it possible to gain this same emotional connection with a service?

Trying to identify a service which boasts a loyal following is somewhat more difficult. Indeed, statistics show that, just 12% of utilities customers in the UK in 2011 claimed to have been loyal to a service provider. Of course this could be down the unique nature of the service industry; however, it can be argued that this lack of loyalty stems from a distinct gap between the customer expectations and the service they receive. Indeed, a recent study reported in the Harvard Business Review found that 48% of customers who had a negative service experience were less likely to feel loyalty towards that company.

From a business perspective - this raises some very interesting questions for the service industry. If providers ensured not only a high but also a consistent level of service, would they see an increase in loyalty? If they focussed on managing every touch point of the customer experience would they ever be able to create the same loyalty that consumers feel for products?

Let me know what you think through your comments.