Brand loyalty: Are marketers facing a sad reality?

For as long as we can remember “Brand Loyalty” has been a measurable performance indicator for businesses around the globe. A critical tool in retaining customers and measuring their propensity to repurchase your brand.

However, there is growing evidence that marketers are struggling to retain brand loyalty. One can think of several reasons why this situation is fast becoming a nightmare for owners of once famous brand leaders:

- Consumers enjoy the benefit of a much wider choice of brands.
- Your customers are better informed and they are leveraging this privilege.
- Market dynamics have forced brands to compete on price for growth or even survival, hence demoted to almost commodity status.
- Traditional channels to market are facing the reality of eCommerce and a global market place.
- In some markets the retailers are making it very difficult for brand differentiation at point of purchase.
- Dare I say that through a generational change consumers have simply become more “promiscuous” or just less brand loyal?
- Once proud brand leaders have become complacent or simply lost their way (think Sony and Kodak).

These are all valid reasons and most likely well documented in marketing reports.

But are brand owners equally to blame for this decline in loyal support for their brand? Are they doing enough to satisfy customer expectation? Is it possible that too many of them take their loyal supporters for granted?

This breakdown in brand loyalty is clearly more pronounced in certain product or service categories. So let’s agree that category dynamics have contributed to turning brands into commodities, with telecommunications and certain household products as valid examples.

Another recognised challenge to brand loyalty would be retailers’ strategy to develop house brands. Their primary objective is a better margin, but no doubt made easier because many consumer brands no longer command a real (added value) point of difference.

A breakdown in trust has become a major challenge for certain brands, perhaps demonstrated most dramatically in the banking sector right around the world. My personal relationship with the bank is pretty much relegated to the most convenient ATM and new credit card technology is fast making that obsolete as well.

So while the reality of declining brand loyalty is easy enough to recognise, where does that leave brand marketers in their battle to protect or grow market share? I cannot claim any ready-made solutions. However, instinct suggests that brand owners need to commit to staying in touch if not ahead of consumer behavior.

- Brands have an obligation to reward and surprise consumers.
- Innovation is critical.
- Retaining the status quo means going backwards.
- Put the customer in charge of the transaction.
- Simplify, make life easier for customers.
- Add value not cost.
- Loyalty should be recognized and rewarded.

And here is a “freebie” for retailers under siege; customers can be turned into loyalists through knowledgeable and helpful sales staff!

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(5) Readers Comments

  1. good article,sir. i do agree that consumers are more fickle in the choice of brands because we are better aware, educated before we decide on what we want. i see that as only a good thing.

    apple is a good example. almost unfaulted in creating almost cult brand loyalty through the pleasure and pain principle in a very crowded market place. not many people will argue that apple makes fabulous, sexy, easy to use very pleasurable products. one of the apple’s best retention strategies for me is that they have created this eco-system around their product and services – itunes, appstore, icloud. even if i am tempted to try out a competitive product, the thought of re-creating all that on andriod would be too painful. genius!

  2. Johan, you say “And here is a “freebie” for retailers under siege; customers can be turned into loyalists through knowledgeable and helpful sales staff!” How true. So how sad that when I responded to a satisfaction survey from the Stamford Plaza Brisbane – having recently stayed there – and taking the time to highly congratulate one fabulous staff member and seriously criticise another – I heard nothing in return. Nada. Zip.

    I would have stayed there again – but I probably won’t bother now.

  3. Advertising is missing it’s target audience because ‘we’ can avoid their rubbish ads schreeching for brand loyalty by simply turning off. I no longer watch TV anymore. I just tune into HBO/Showtime etc and watch what I like. HBO and Showtime are my new brands, so are iTunes and BeatPort. No annoying calls for brand loyalty just excellent product. When I go to the Supermarket, I read labels not brands, if it’s healthy and good for the environment I will buy it, but I have no loyalty. Whenever I purchase coffee I buy it off the best Barrister, offer me a loyalty card I can’t be bothered. Offer me a freebie for anything, I may use it once. I have the power to decide what I want – who I will support with my loyalty – my hard earned dosh. The mega brands have lost their power over me, the small independent sellers have got me… for now until something better comes along.

  4. Brands are almost becoming an over-used term. Brands stand for experiences – these days we are in a much more product oriented society. These products – and the experiences with them – are ephemeral. And the use of the term ‘brand’ is almost ubiquitous. I like Joshua’s notion of Categories becoming the brands in a world of the more informed consumer. Labels, the web, word-of-mouth, increase of generics – all are changing the world of the once powerful Megabrands.

  5. Pingback: Brands have nowhere to hide, Advertising

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