The ability to love and to show loyalty to others is thought of as the most noble achievement of the human species. And the idea of love and ensuing loyalty for brands likewise goes unquestioned as the nirvana to which marketers must aspire. Investment experts and business schools extoll the price/earnings ratios that brands offer their investors, often talking of the brand as mystical and awe-inspiring. And communications gurus join in the gleeful celebration of brands as magnets for love and loyalty; loyalty that at best, can go beyond reason. The idea of loyalty is a constant and recurring theme all through marketing discourse. And as organisations look to tap into the growth of Asia, they too ask, what does brand loyalty look like in Asia? How do we get it? And where have some Western brands gone wrong?
These may be the wrong questions. For the relationship between loyalty and growth isn’t clear. Yet so pervasive is the discourse that laws are even quoted to support the primacy of the loyalty idea. The Pareto Law states that typically, 80 per cent of a brand’s volume comes from the heaviest 20% of its buyers. Thus in this vision, it follows that growth must be obtained by deepening that loyalty and encouraging others to become equally loyal. Relationships must be cultivated.
This thinking is alluring and guides many reflexes in marketing and communications, perhaps because it seems intuitively true. We can all think of a brand we buy time and again, and actively seek out. But as Byron Sharp argues in his book How Brands Grow, most brands, in most categories, that show growth in a given period, do so by increasing penetration, not by increasing loyalty. There is relatively little divergence in terms of average purchase frequency (i.e. loyalty) between lead brands and even distant followers. His data suggests that the brand with a relatively low share is more likely to catch up with the lead brand by getting more people to try it at least once, than by getting its existing customers to develop even greater loyalty to it. With increased penetration, usually comes a small uptick in loyalty. Further, Sharp shows that the Pareto Share rarely accounts for 80 per cent of a brand’s value; that Pareto Share is nearer the 50 per cent mark in most cases. This is true in the West and the limited data so far available (see Uncles, M., Kwok, S., Wang C. A temporal analysis of behavioural brand loyalty among urban Chinese consumers. (Journal of Marketing Management 2010)) suggests this may be equally, if not more true in Asian contexts.
Clearly those heavy 20 per cent are often of huge importance to a brand, not least because they may be advocates for it. And the idea of a core franchise surely helps develop a sense of purpose and focus within organisations. But strategies looking to develop “the relationship” are by necessity likely to look different from strategies looking to lengthen the tail. And the enduring belief in developing loyalty, sometimes religious among Western marketers, may suck organisational energy away from a greater focus on driving the penetration (through innovation for example) from which growth is more likely to come.
The common Western reflexes about how brands work, are equally dubious in the Asian frame. In fact more so, for some specifically Asian reasons…
Relationships
Shelley Lazarus of Ogilvy Worldwide suggested in 2005 that Haier and Lenovo were not really brands, rather brand names that aspire to be brands. She suggested that these organisations “must learn” that branding is about intellectual and emotional relationships with people. Whether or not the organisations have learned this, what we can say is that since 2005, Lenovo has become the world’s biggest computer company, number one in five of the world’s seven biggest markets and Haier the world’s leading white goods manufacturer. Have they achieved this by developing emotional and intellectual relationships with consumers? They may have done, but what’s beyond doubt is that they’re companies that have put huge energies into distribution (especially Lenovo) and innovation (especially Haier). Energies in organisations are finite, and they’ve devoted theirs to making new stuff first, brand relationships (in Shelley Lazarus’ sense) second, and they’ve grown hugely in Asia (not only in China). Is this talk of relationships helpful here?
Abstracts
Look at any Western brand model and it will be clear that marketeers devote energies to developing abstracts (values, philosophies and the like) in their brand planning and ensuing communications. But it’s striking that the notion of the abstract on which much of the Western brand discourse is based is problematic in many Asian contexts. The Chinese philosophical tradition has never shown quite the same fascination with the notion of essence as has the Greek philosophical tradition on which much of modern Western language and thought patterns is based. Some argue that (East) Asians simply aren’t wired to think about abstracts in the same way that Westerners are. Yet nearly all brand models have at very least an essence box, and most have personality and values boxes too. Not to say that they shouldn’t have, it’s just that models tend to precondition what goes into the boxes and we must ask ourselves if the kind of thing that’s likely to go into those boxes is always helpful in Asia.
Consumers in emerging markets (especially China) seem less preoccupied with the abstract values of brands and far more preoccupied with ideas that Western researchers would regard as mundane. On a recent qualitative study for a brand of luxury watches conducted in second-tier cities in China, personification exercises were met with insistent responses to do with the resale value of those watches! Western planners are apt to declare such responses ‘overly literal’ — the product of people too shallow to articulate aesthetic or abstract ideas. Such value judgements get in the way of good consumer insight.
Asian Context over Western Content
Social Psychologist Richard Nesbitt argues, based on empirical evidence, that Asians tend to be aware of contexts and the interrelationship of things with their contexts, far more than the specificities of the objects themselves; in the world of brands, this may well mean that an Asian consumer is likely to be far more influenced by where she sees the brand, what it looks like on shelf in relation to others and what it has to show for itself in terms of innovation, than by its inherent ‘content’ or what it 'stands for'.
Asian media environments
India and Indonesia are the exception in the Asian context in so far as TV spots tend to be 30 seconds or longer. In China, most spots are 15 second and the 15 second spot predominates in many other Asian markets, including Japan. This has implications on the type of narrative that can be constructed. Yet it is rare in research to see stories designed to work against specific local objectives in 15 seconds. The norm is to see stories designed to build love or to contribute to a relationship over 30 or 60 seconds. Commonly, they are researched as such, but in reality, squeezed into 15. The idea of ‘quality 15 second’—creative designed to work in 15 seconds—is a novel one in many circles.
Brands should be judged on their ability to deliver growth. But the notion that they do so because of their mystical power to elicit loyalty and love is not always helpful. And it’s even less helpful in Asia where context trumps content, where local competitors in many categories, especially in China, are growing by doing first, saying second, and where tangibles seem to be more of a draw than narratives and abstracts.