Times are changing. Markets are becoming more and more saturated, and competitors are gaining market share more aggressively as consumers become increasingly encouraged to try new brands. It is becoming progressively essential for brands to have a distinct and unique proposition that positions themselves in a credible and desirable place in the mind of the target audience. The benefits of such are highly lucrative, but with customer loyalty becoming gradually illusive, many brands are searching for new ways to keep consumers engrossed.
True loyalty exists where consumers have strong relative attitude towards a brand, and that is usually expressed through repurchase behaviour, but varying degrees of trust, belief and engagement mean brands are finding it ever harder to find true loyalists. Product quality and service excellence used to be key in driving brand loyalty. However, modern markets are fiercely competitive, and only brands with a high emotive connection with the consumer are benefitting from loyalty. Brands that are able to express their story in an emotive and engaging way are winning the battle with consumers. However, the increasing need to be transparent in everything you do is changing the way brands act.
The changing landscape of social media has meant that there are now more channels than ever for consumers to express their full feelings of a brand. Brand stories that do not connect, promises that are not kept and a purpose that is merely talked about will all be found out very quickly. The increased presence of social media in everyday life has meant that consumers are now more assertive and often condemning in their appraisal of brands. It is fair to say that there is now no hiding place from public perception, and transparency is what the world now expects with brands needing to maintain their promise or risk being put out to dry by the unnerving communal masses.
Not too long ago, a distraught passenger of British Airways took to Twitter to express his anger over his lost luggage. The user went to the added lengths of purchasing an ad with the social-media site and promoting his anger to the world. This news soon started trending online, and the slow response of the airline was exposed and soon exploited by other Twitter users. Essentially expanding economic instability around the world as well as certain social agitation has led to modern consumers being more sceptical and reviewing their dependency of a single brand. Today transparency along with empathy and never failing the consumer are increasingly seen as an essential part of building brand equity with the goal to achieving consumer loyalty.
If a brand’s purpose is truly intertwined within a company’s strategic management, then both consumers and employees will fully believe in the brand. This belief is the fundamental building blocks for brand loyalty. Building loyalty takes time and a paradigm shift will not happen over night, with the change from being a consideration brand to one that is top of mind generally a slow one.
Marketing inertia is one reason why the conversion of brand loyalty can happen so slowly. In order to change this initial inertia heavy financial investments are required. And with no tangible return on investment, it is often a risky strategy in the eyes of many CEOs. This is partly due to market leaders having a stable and stronger position to competitors as the strength of their brand loyalty is often much greater than that of weaker competitors or new brands entering the market. These market leaders look to increase this marketing inertia in order to slow the progress of competitors, allowing them to stay ahead applying marginal changes to the product or service to account for consumer tastes whilst staying relevant in their minds.
It is important to note that loyalty cannot simply be viewed as a repurchase. True loyalty is a great asset, and there are many business benefits to achieving such a connection with the consumer. An increase in loyalty will ultimately see a reduced sensitivity to changes in price and therefore the ability to become more profitable is much greater.
Brand loyalty is something that has been studied at length and one subject that has extensive papers written on it. Philip Kotler is one such researcher who noticed that there are four key patterns of behaviour when it comes to brand loyalty.
Patterns of loyalty behaviour:
1. Hard-core loyals: Consumers who will buy one brand all of the time
2. Split loyals: Consumers who are loyal to 2 to 3 brands
3. Shifting loyals: Consumers who move from one brand to another
4. Switchers: Consumers with no loyalty; deal-prone and looking for bargains
The main finding from Kotler’s work is that loyalty is multidimensional with several distinct psychological processes in place. Value, trust and satisfaction are key factors in the eye of the consumer in achieving trust however repeat purchase and commitment are seen as a necessity for loyalty status. So loyalty comes in different forms. A clear and distinguishing brand positioning can help challenge these patterns of behaviour, establishing the brand in the mind of the consumer, driving value and trust so that consumers ladder up to eventually become hard-core loyals.
Ford has worked incredibly hard to distinguish itself in the automotive industry, clearly defining its positioning and brand promise. In 2011 fewer than one in five US consumers who bought a new car stayed with the same brand, but out of the top 10 vehicles with the strongest brand loyalty, Ford had six models. Weathering the economic downturn enabled Ford to resist taking any government loans, in turn building consumer confidence in the brand. The stability within Ford allowed them to listen to consumer feedback and align corporate objectives that resonated with its target audiences, manufacturing more fuel-efficient cars at lower cost. Combined with a compelling story of authentic heritage, Ford has become the default car for many US consumers.
Trust comes first
Adapting to the modern consumer can be tricky for many brands, and building brand loyalty can only come once the consumer has built up trust with that brand. A unique position will allow a brand to achieve consumer consideration within the market, but only after a positive trial of the brand will it start to develop any loyalty. With continued positive trials the consumer will take these great experiences and ultimately drive towards becoming a brand advocate.
This is Holy Grail for any brand, but still requires constant brand management in order to maintain and grow these brand ambassadors. True loyalty is a great asset and there are many business benefits in achieving such a connection with the consumer, however defining a unique brand position is no easy feat.
Too often brands simply know what they functionally do and how they physically do it, but rarely do they have the answer to why they exist. This purpose is the overarching reason why a brand breathes and when successfully pinpointed can provide the focus required to differentiate a brand in the market. Providing consistency and continuity over decades, it can also enable companies to adapt to changing circumstances but also to stay relevant.
Consistency is critical and the overall brand purpose needs to be fully integrated into both product and corporate marketing before the benefits of brand loyalty can be fully felt. Is the brand promise authentic to who you are? Is it creating real value, and more importantly a differentiated value? These are the questions that need to be asked when defining who you are as a brand.
But defining the brand promise is just the start. Once defined, go do it, go and be who you are saying you are. Only then, once ingrained in the company should you communicate it to any external audiences. What strong brands have in common is the ability to deliver credible, relevant and distinct promises consistently everyday across all touch points. This success is reliant on how well the brand promise is embedded into the culture of the brand. Employees need to understand the personality of the brand and embrace it. After all they are the brand. If the employees won’t buy in to the brand promise then neither will consumers.
So if the brand promise is relevant and differentiating then there is a true market opportunity available. But in order for a brand to make use of such an opportunity, ongoing analysis of consumer insights is essential. No brand should view loyalty as a closed loop and regular feedback from consumers is imperative if a brand wishes to stay ahead. Brands need to learn what customers are saying in the rawest terms and use this data to improve. Brands that are closed off to what the public want will be exposed and reputations will be tarnished.
There is a lot to be said for the “humanizing” of a brand, and this process should be a dialogue between brand and consumer rather than a one way dictation. Opening up to consumers will deepen emotional connectivity and deliver fundamental communications that help drive brand loyalty. Facebook has been a pioneer in channeling consumer feedback and implementing changes to it’s website based on the open conversation it has with its users. Updates to the website platform are regularly rolled out and sometimes to heavy criticism. However due to understanding the key needs and requirements of its users, all updates are based around usability. It is never long before users adopt the new functions and continue using the site with astronomically high frequency.
However the value of any brand is in its story, and brands that communicate a poor story with ultimately fail to connect with their audience. So often it has been said that brands need to become better at story telling as this is what drives real change. Building passion within a brand can only really come from a captivating story. Comprehending the gap between the emotional condition of a brand’s market and how the audience perceives that brand will lead to the most exclusive stories, which in turn can have a positive correlation to loyalty.
Brand loyalty is becoming increasingly important as consumers are now more experienced and have the technology to reach any information they wish in an instant. This new daring and liberal consumer is more open to trialing new brands and have enhanced expectations as to what a brand should offer. Understanding this modern consumer and offering the value that they crave, will fill the expectation gap and brands will start to profit from delighted, and loyal consumers.
Tom Child is a strategist with Landor.