Spotlight on Brand Loyalty

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Spotlight on Brand Loyalty

By April Miller - 01/15/2019

Five industry experts weigh in on how to think about brand loyalty, what to focus on and how to build it

Brand loyalty – does it still exist or is it a figment of marketers’ imaginations?

For many decades, if a brand produced it, someone bought it. There was strong loyalty, but there were fewer brands and there were fewer places to purchase those brands than there are today.

Now, there are an overwhelming number of choices – in what to buy and in where to buy. There is 24/7 access to information. “Shoppers want to understand your brand and know transparently what your brand stands for,” says April Carlisle, vice president, NRS, shopper marketing, Coca-Cola Co. “And this is not exclusive to Millennials. Every generation is interested in this. Technology has enabled this information to be at their fingertips now.”

The power has shifted from companies to consumers. “This is a major wake-up call for brands,” says author and growth strategist Eddie Yoon. “Loyalty to the king exists in a monarchy, but in a free society, it’s silly to ask. There are brands that haven’t woken up to this yet – the king has been overthrown.” Only those that make the shift from a product-driven to a consumer-centric mindset will win shoppers’ devotion.

How not to create loyalty? Keep focusing on your quarterly results.

How to win it? Focus on your customers. Have a purpose. Care about your category and care about shoppers as individuals. “Anyone who believes profit is more important than purpose will go out of business,” says Duncan Wardle, founder of the firm Id8&Innov8 and former head of innovation & creativity at the Walt Disney Co. “This is a critical cultural shift that can’t be ignored.”

To understand the changes in brand loyalty, we talked to several industry insiders. Here, we present an edited roundtable discussion.

Why do brands still care about building loyalty?

Nicky Jackson: It is a huge focus for them because the consumer’s affinity for their brand is what drives the brand’s value, blocks out the competition and ensures continual consumption and repeat purchase.

Carlisle: That’s all we think about. How we can continue to reach people and let them know about how great our products are and how we can enhance their lives.

So brand loyalty does still exist?

Carlisle: I think there’s still significant loyalty to brand. Where there’s less loyalty is to where can I best procure that brand.

Wardle: I don’t think it has altered significantly, as long as brands have stories embedded in a core human truth and they care more about purpose than profit.

Jackson: It has given way to trend loyalty. When kombucha started gaining popularity, despite no real mainstream brands producing it, consumers veered away from purchasing existing functional beverages to purchasing kombucha. It shows just how consumers shift on trends as they emerge, rather than shift brands.

Don Growhoski: Brand affinity – personal, emotional connections consumers have with brands – has replaced it. This makes the brand relationship much harder to break than one based in loyalty.

Are there things that we mistake for loyalty?

Yoon: Consumer laziness. I can do the Amazon Subscribe & Save and it’s right there at my fingertips. Lots of big brands that are available everywhere might want to believe it’s loyalty. No, you were just the easiest option.

How is the industry rethinking what loyalty means?

Growhoski: In the past it was about consumers being loyal to brands. Now it’s more about brands being loyal to consumers – their needs, desires, values.

This idea of a brand being loyal to a shopper, what does that look like?

Yoon: Brands can’t just be loyal to themselves. Why would you be friends with someone like that?

Wardle: If every time those in the c-suite wake up and think how can we make more money and are driven by that, that is going to be their failure. There has to be purpose – and purpose is not a charity but what you stand for – over profit.

Yoon: Brands that are committed to not just the people who buy the brand, but also the people who buy the category – that’s a better strategy. That’s loyalty to the people who love the category, and those brands will always do well over the long haul.

What efforts are not working to build loyalty?

Jackson: Having a cookie cutter solution. Customers are different and need to be spoken to in different ways.

Growhoski: Transactional behavior such as discounting.

Carlisle: When I’m trying to read an article on my phone and every two seconds another digital banner pops up and blocks the content. It’s a negative reaction to that brand.

Wardle: Focusing only on big data and missing the other half of the story. Have you ever spent a day in the living room of your consumers? This is where you’ll find real insights.

Does personalization help build loyalty?

Jackson: It’s a huge factor for consumers and a strong driver of brand loyalty. Not all consumers are the same or fit neatly into a specific consumer box. Brands that have personalized offerings will ultimately be the winners.

Wardle: Without a purpose and a story, personalization only helps in the short term.

Carlisle: Just because you can, doesn’t mean you should. There can be a creep factor. You really have to consider if that is an opportune time and place for the brand to reach out to me.

What impacts have Millennials had on brand loyalty?

Yoon: In general Millennials have a broad rejection of big government, big banks, big brands. They give the benefit of the doubt to mom-and-pop and niche brands. Many will assume that when push comes to shove, that small entrepreneur is loyal to their customers and the big corporation is loyal to their shareholders.

Wardle: Not only will Millennials and Gen Z not buy from companies that they don’t believe in what they stand for, they will not work for those companies.

Jackson: They expect brands to be transparent about their purpose, or how they are giving back to the community. If a brand isn’t transparent, they will switch to one that is.

Carlisle: All generations appreciate the ability to know from head to toe what your brand stands for. What is important – not just to Millennials – is what role your brand can play in their life and how you are solving their challenges.

Some have claimed Gen Z will act more like Boomers when it comes to loyalty. Thoughts?

Yoon: I’m not convinced it’s a function of the generation but more just a cycle. There are certain life stages where in particular categories you are more likely to be brand loyal.

Jackson: I don’t believe future generations will have as strong of brand loyalty as the Boomers. Gen Z are part of a generation that is global, social, visual and technological. They are the most connected, educated and sophisticated generation ever, and while they may act more like Boomers, brand loyalty for them is similar to brand loyalty for Millennials. They can easily switch or substitute a new brand based on trend, price, quality or convenience.

What’s it going to take to earn brand loyalty?

Yoon: A brand and a consumer – it’s a relationship, a marriage. And the moment you take a marriage for granted is the day bad things will happen.

Wardle: I was working with a tool company and stood in the aisles to watch shoppers. They don’t care about your brand or your price point or even your products. They were animated talking about building their dream kitchens and bathrooms. Be the brand that helps them build their dreams. And then imagine what other products and services you could create from that.