The Death (and Rise?) of Brand Loyalty

January 22, 2015
January 22, 2015 Tom Allin

A few months ago while doing some social listening for one of our clients, I came to a startling conclusion: Loyalty is a precious commodity.

Granted, this is something I have known for a while – a few years ago Ernst & Young released a report that found only a quarter of American consumers are brand loyal. Still, it was almost painful to see actual examples of people in the process of becoming disloyal.

On one end of the spectrum, there was the loyalist-swayed-by-price:

  • “I’ve been a _______ customer for over 20 years, my wife over 15 years…I usually stick with companies that I’ve been a customer with for a long time but this is a pretty significant price difference.”

And on the other end, there was the anti-loyalist:

  • “Being a good long term, loyal customer means nothing. Switch to a great rate, and be prepared to switch again in two years if you really want to maintain a good rate. Otherwise in three years you’ll be saying, “Hey, where’d that 15% savings go?”

It was clear that people felt that price – more than anything else – was the most important factor in their decisions, but there was also an apparent mindset that companies were more focused on getting new customers (i.e. 15% savings) than keeping existing ones.

Customers responded accordingly.

Here’s the line, though, that stuck out most to me: “I haven’t seen my [customer service rep] in well over 15 years.”

To me, this sentiment signaled a reason or an excuse to abandon a company. Essentially, this customer was saying, “I don’t feel connected to you, so you won’t care or notice if I’m gone.”

Anyway, all this disloyalty gloominess got me thinking about what brands could do – if anything – to inspire loyalty among their customers. Here are a few thoughts.

  1. Investments are better than transactions.

As long as your customers view your relationship strictly as an exchange of money for product/service, there is no reason to think they will harbor any sense of loyalty to you. Instead, it’s important that a brand allows its customers to invest in it – and vice versa.

So, what does that mean? Take secret menus as an example. As Svati Narula points out, most secret menus are neither secret nor menus. Instead, they’re just examples of companies that go to extra lengths to make sure their customers can order whatever they want. People love secret menus for a variety of reasons, but I think the primary reason is that they make people feel like they’re actually helping the company create something.

Two businesses right here in New England – b.good and Eastern Bank – also do a great job of investing instead of transacting. B.good bought an El Camino, asked its customers to name it, and then gave the winner the keys for a weekend. Eastern Bank, meanwhile, recently surprised one of its business clients with a redesign of her pizza restaurant.

In both cases, customers had the opportunity to invest or be invested in by a company – and they loved it.

  1. “Cheap” gets short-term wins.

The quotes at the beginning of this blog are a great illustration of this point. While being the “cheapest” product or service is a powerful tool, it doesn’t guarantee loyalty over the long run. When someone else begins offering a cheaper product, what does your brand offer then?

More importantly, from a brand strategy standpoint, “cheap” simply isn’t a very inspirational platform to hang your hat on. It may produce reactions – but not emotions.

Take the long view, and look beyond staking your brand claim on “cheap” alone.

  1. People stand for things. Brands can too.  

Full Contact is really lucky to work with a number of brands that care about giving back. Arbella Insurance’s foundation supports New England non-profits, and One Mission does incredibly important work helping kids deal with cancer. This is more than just corporate social responsibility; this is really focusing on something as an organization, and saying, “This is what we care about.” Like I said, people certainly do – so why not let your brand, too?

Here’s the thing: People, by nature, are loyal creatures. We like to believe in things and like to support people, institutions and communities that, we feel, matter. When I read reports or conduct social listening that suggest consumers are less loyal than they used to be, I don’t blame the consumer; I think about what brands can do to better encourage loyalty. Establishing brand loyalty isn’t something that’s easy or natural, but it’s certainly worth the effort.

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