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 e-commerce and a global marketplace.
• 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? 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, or ahead of, consumer behaviour.
• 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 recognised and rewarded.
And here is a “freebie” for retailers under siege: customers can be turned into loyalists through knowledgeable and helpful sales staff!
Johan du Toit is a brand manager and advertising consultant. He has worked for brewing conglomerate SAB Miller in Australia, at Integria Healthcare, and was the chief executive officer of brand-building network Ogilvy & Mather in Cape Town, South Africa.
This article first appeared at Firebrand Ideas Ignition.