A couple of posts by Steve Olenski caught my eye the other day. I first took note of The Most Powerful Brand Ambassadors In The World May Not Be Brand Loyal and then his related post, Is Brand Loyalty Dying A Slow And Painful Death? If you’ve got a moment, they’re worth a read (just be sure to come back).
While Steve’s posts are thought provoking and well researched, I have an alternative perspective on the implications of changing loyalties for brands.
The shifts we are facing in our current market environment are undoubtedly changing the way buyers (consumers and B2B alike) interact with brands. Technology is putting power in the hands of the people, and marketing will never be the same. Brands have been liberated in the process.
We’ve been through a tough economic downturn that some would say is not yet behind us, forcing people to make tough choices between what they want and what they can afford. Steve writes, “Give someone something i.e. a discount or coupon and brand loyalty goes out the window.” That is true in many cases, as my own shopping patterns attest.
However, much as the ownership of brands has undergone a dramatic transformation in the social media era (see my post, Is Social Media the Death of Branding) brand loyalty has also evolved.
The Traditional Perspective
In the traditional view, brand loyalty is seen as the tendency for a buyer to stick with the same product each and every time. Many brand loyalists have been known to spend more for a preferred brand not because it was better, but because they liked it and they were loyal. Picture the typical grocery shopper winding through the aisles picking packages based on brand without even checking the price.
Measured in terms of repurchase behavior, I can see the case for brand loyalty disappearing. Today at least, individual purchases are more highly considered and less automatic than in times past. Buying behavior for any given transaction may be influenced by brand loyalty, but other factors such as price and convenience often win out. Now our grocery shopper might be an extreme couponer or simply a parent on a budget trying to stretch their dollars.
The Broad View
If you look at brand loyalty in a larger sense, the concept is alive and well. When one sees brand loyalty as an aspect of a long-term relationship between a buyer and a brand, the whole game changes. Brand loyalty isn’t dead, it’s just different.
Brand loyalists are frequently brand advocates, sharing their preferences with peers. They make recommendations and influence perceptions among those who may not have tried a brand. They choose their favorite brands in secondary (resale) transactions. They pick the preferred brand when someone else is paying.
The trick for brand marketers is to understand who these loyalists are, and if they’re not buying as often as they would like, to uncover the reasons why.
Brand loyal customers who chose other products due to price will come back when a viable alternative is available: a line extension that doesn’t erode the brand value, an occasional discount or bonus, or a compelling offer that adds value to the purchase.
Aspiration is Human
So much of branding is about aspiration, creating an urge to do business with a brand that confers status on the buyer. Aspirational brands have loyalists who have never actually used the product. These people still talk up the brand and plan to make a purchase as some point in the future.
Making high-end brands attainable to the masses can detract from their aura. Striking a delicate balance between affordability and exclusivity forges a path to long-term viability by ensuring sales growth from new customers.
Whether you’re selling a high-end brand, a B2B brand, a consumer product or a service, understanding the new dynamic of brand loyalty is important. In the future, loyalty will be cultivated by relationships and second or even third party connections much more than by corporate brand messages.
Marketing that merges art and science to finesse these relationships with less reliance on in-you-face messaging will trump more traditional approaches.
We’re in an era of influence and proof, with both required to earn the right to loyal customers.