is brand loyalty dead?

What is Brand Loyalty? Typically, brand loyalists have the following mindset: “I am committed to this brand”; “I am willing to pay a higher price for this brand over other brands”; “I will recommend this brand to others”. Brand loyalty is a consumer's preference to buy a particular brand in a product category. It occurs because consumers perceive that the brand offers the right features, images, or level of quality at the right price. This perception becomes the foundation for a new buying habit.

 

However, is there such a thing as brand loyalty anymore? People have been talking about the declining importance of brand loyalty in marketing arenas for some time now. Many suggest that low switching costs, a seemingly unlimited choice of stores, products and services coupled with the spread of information technology has led to better educated, more fickle consumers who are less willing to place their faith in a logo or a name. Moreover, the Web is clearly a cause of this shift in shoppers' attitudes toward brands. When Web shoppers' actual behavior is monitored, it demonstrates that brand loyalty is on the wane. The best evidence for this is the rise in use of Internet search engines for shopping - 92% of all Web users employ search engines such as Yahoo! and Google to shop or purchase online according to NPD Group. According to DoubleClick, 92% of searchers never use brand names in searches before making a purchase. And even those who do use brand names don't start there - they start by using generic names at the outset. Only after their generic searches find some brand names do they search for brands. Then on the other hand I think Playstation vs. X-Box; Apple vs. Microsoft; dog people vs. cat people. And what about that Tommy Hilfiger-like buzz?

 

When I saw a guy with the Apple logo tattooed on his forehead, I was convinced that brand loyalty is still very much alive! It's just that too few companies focus on assessing where their brands stand or for that matter, what they stand for... And it's obvious which companies do it, and which companies don't. For the first batch, think Starbucks, Virgin or Apple.

 

Talking about Apple… there are 25 million people in the world who use a Mac; and I am one of them! But unlike other computers, Mac users don't just use Macs, they develop some sort of passion. Mac users are probably more loyal and enthusiastic about using Apple products than any other group of computer users. Mac users are even referred to as Maccies, Macheads or Mac addicts. Some fans go as far as having Mac-related car registration plates like MACMYDAY, tattooing the Apple logo on their bodies, have whole collections of Apple products, and religiously pilgrim to the Macworld annual conference where Steve Jobs is almost worshipped as a god. Apple has somehow managed to create a loyal customer base with a 'cult-like' and emotional following. And I am, well, a true Mac convert, yes, I have switched; and I have never looked back. What do I see in Apple? Innovation, creativity, design and simplicity - and some sense of being different as opposed to conforming. Apple don't just sell products, but a lifestyle, a community, an experience, a way to 'think different'… - a brand.

 

Building loyalty to the point of advocacy like Apple has achieved is about the total brand experience. When shoppers sleep outside of stores just to be one of the first to buy an iPhone, it's obvious that Apple Inc. is a company that enjoys fanatical brand loyalty. However, this brand success is not the result of pure luck or forces beyond Apple's control; it's part of a well-thought-out plan to deliver strong products and create a whole Apple culture.

 

(1) Take the Apple store, one of the biggest is the one on Fifth Avenue in NYC - it's open 24hrs. Apple stores don't just sell products, they sell digital experiences (or lifestyle solutions). The stores are organised into solution zones, e.g. gaming, video production, music. The stores provide training and expertise, and a community feel. Things like workshops and the Genius Bar keeps customers coming back. All this is supported by the online experience - from a calendar of in-store events to a concierge service to manage bookings with technicians. (2) Apple users generally don't have to stray to find products and solutions they want. Apple offers complete solutions: products complement and complete each other. Buy an iPod, and you can download music via iTunes. (3) Apple carefully considers what consumers are looking for, so its products are a result of both extensive research and strong design. This meticulous planning is a large contributor to Apple's high customer-satisfaction rates. (4) All of Apple's products have the same basic architecture. Because of this consistency, customers who already own Apple products have a good idea of what they'll be getting before they make a purchase. (5) Although the architecture of Apple products is consistent, its portfolio is not. The company offers consumers a number of different ways to enjoy its products. By giving customers an opportunity to employ Apple in their living rooms, pockets and offices, Apple makes it easy to stay loyal to a brand they already like. (6) From packaging to aesthetic design to user-interface experience, Apple makes its products accessible and attractive. (7) And by selling the products to schools and universities, Apple captures customers before they even know that they are customers. Clever!

 

What can we learn from Apple? Brand loyalty is about the whole experience one has with a brand. It has to be EARNED. It does not occur over night. Is a long-term investment. Every time someone interacts with your brand, he or she forms perceptions and memories, - an experience. Don't ignore your brand touch points. EVERY point of contact matters.

 

Why is brand loyalty so important? For the business owner, it is easier to keep existing customers than to search out new customers. Advertising and marketing to new customers is four to six times more expensive than the cost of marketing to your existing customers. A brand-loyal customer is less sensitive to and less likely to stray to a competitor's promotions.

 

In:fact

1. Customer loyalty can be worth up to 10 times as much as a single purchase.

2. It costs four to six times as much to get a new (first time) customer as it does to keep a current one.

3. A dissatisfied customer will tell 9-15 people about it. And approximately 13% of your dissatisfied customers will tell more than 20 people about their problem.

4. You have to satisfy three to four customers, for every one that is dissatisfied with you. It's tough to work with a 4:1 ratio against you, which is why your customer satisfaction efforts are so important.

5. Companies can boost profits by 75-100% by retaining as few as 5% of their current customers. (Harvard Business Review - September '01)

 

What makes YOU different? Ask yourself, what is it that my product or service does that makes it different? What is it that makes me stand out? What can I do to make my customers not want to consider switching over to other brands? How can I try and attract my competitor's customers to consider switching to my brand? Does my brand evoke the same level of excitement and for that matter loyalty as Apple? If not, WHY not? The key for you as a small-business owner is to create brand loyalty. After all, consumer behavior is habitual. Habits are safe and familiar. Once a customer comes in contact with your brand or makes an initial purchase and is satisfied, the next contact or purchase is now both familiar and safe. That is where your marketing, both before and after the sale, is critical to encourage repeat purchases, build a positive customer experience and ultimately create a loyal customer base.

 

If you need any help with your marketing or web design, please do not hesitate to ask, even if it's just some advice you need. Simplicity would be happy to help. Interested to learn how we can help? View our services; or simply contact us to discuss how we can help.

 

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