Brand Loyalty: What it is, why it matters, and the uphill battle it faces (Part II)

In yesterday’s post, we discussed the importance of brand loyalty and the struggles it faces as we move forward into an ever-increasing marketplace in which consumers’ expectations are based around the best possible value with only regards to price.

It’s not as though the consumers are to be blamed for the change. The explosion of eCommerce allows companies to business in more affordable, more efficient ways than ever before. Traditional retailers, your cornerstone brick-and-mortars, can’t compete head-to-head without adapting.

Even with that said, adaptation might not be a legitimate option for some brands so their reliance on brand loyalty and repeat business is of the highest importance. It’s why Apple products can continue to cost the consumer more than most of its competition but continues to thrive and trump its foes.

It’s why people are willing to pay $5.00 for a single hot beverage.

Brands like Apple, Starbucks, McDonald’s, and Wal-Mart have the advantage of a built-in audience dating before the eCommerce boon. But what about the brands attempting to leave their digital footprint right now? How can they compete?

Here are a few ways that brands can establish a loyalty among a consumer base, to at least diminish the chances that people leave simply because they find a competing product at a much lower price.

The feeling of exclusivity

I would venture to say that most people don’t buy a $70,000 car because it drives so phenomenally better than vehicles in the $30-$40,000 range. Let’s be honest. People want the brands they wear, and the brands they drive, and talk about, to say something about them.

Whether it be for status or a sub-culture that they’re currently infatuated with, in a consumer world, consumers are defined by the brands they purchase and interact with. There is no greater power than the feeling of exclusivity.

Roll’s Royce. American Express Black. Any airline’s elite status club. These all say things about the individual and there is a certain belief and status associated with these iconic brands: “I’ve achieved a level that most everyone else cannot.”

Of course, not every brand, especially in the world of eCommerce, can set a level of exclusivity strictly for the wealthy, but consumers merely want to feel as though they are a part of something that not everyone has access to, at least not right away.

The more exclusive the feeling, the more individualistic the consumer feels. And there, you have created a loyalist.

Reward system

Show your customers you care about their business and appreciate them for choosing your brand over any other. No marketplace utilizes this idea more-so than that of credit cards.

Each card brings its own reward system to the fight, whether offering better cash-back programs or travel accommodations, each is vying for your signature (and your debt!).

It isn’t just credit cards as hotels and airlines are nefarious for waging battle against competitor’s programs. We see it today with convenient store chains. Grocery stores.

Amazon.

And the numbers don’t lie, this stuff is important. A 2009 study conducted by marketing and publishing research firm COLLOQUY showed:

1.8 billion memberships in US loyalty programs

That’s 14 per household

44% are estimated to be active

57% of respondents participate in loyalty programs

Quality

The first thought companies get when they are being under-cut by competitors is to find parts of the manufacturing process they can alter to reduce cost. If they cut a corner here, they can save a dollar there. Get rid of this feature, save $xxx amount.

But if consumers are hunting, and willing to pay for, quality first, and as their priority, then you must keep that quality consistent and their level of expectation on par with what it has been in the past.

Or risk losing them.

My loyalty to Apple is an example of this facet of building brand loyalty. It certainly isn’t the exclusivity. The iPhone 5 topped 5 million units sold on launch weekend, alone.

Mine stems from years of successful relationships with the level of quality of their products. I I have owned two Android phones and have had hardware issues with both. I have gone through half-a-dozen laptops.

Yet my iPhone, my years of iPods, and my iPad have never failed me. Not once. It’s a level of quality I have yet to find in another arena of technology that I use so consistently. And this is just one consumer’s experience. Apple possesses as many die-hard brand adorers as detractors.

Interaction and feedback

Arguably, digitally, this important aspect in building brand loyalty is the one that companies have the most control over these days. With social media, and the growing field of mobile ‘everything,’ people are more connected to one another and to purchasing than ever before.

They are connected 24/7. Because of this, it is important than consumers are able to find the information or answers they want when it it is convenient for them. Social media allows brands to interact with consumers in their comfort zones.

No one enjoys walking through a store and being bombarded with shark-like sales representatives at every turn. If consumers feel pressured, their fight-or-flight responses kick in and your likelihood of achieving the sale has diminished greatly.

But what if they were able to receive an answer to a pressing question, by tweeting it to a brand and receiving a response online? What if they could receive important updates, news, and promotions in their Facebook feed?

We are throttling into an age where consumers have all of the power, and it’s important that they feel as though a brand really values them as a customer.

And why shouldn’t they?

If your brand won’t, odds are, the consumer can find a dozen others that will. 

Brand Loyalty: What it is, why it matters, and the uphill battle it faces (Part I)

We, as consumers, all have brands that we are undyingly faithful to. Whether it be the silver apple or the golden arches, or Coca-Cola over Pepsi, there are products and services in our lives where we simply will not choose anything else. This is referred to as brand loyalty and it is one of the keys to a brand’s long-term success.

Have you ever stopped and considered why you are loyal to a particular brand? Price? Doubtful. Generally, the brands we are committed too, and rave about to friends and family, are not the most affordable.

Status? Does what we purchase define us? Are we loyal to a brand to show off? To say, look at me world, I can afford such and such.

All of these, truthfully, are valid reasons why consumers stick to certain brands over others. It’s why Chevy owners and Ford owners despise one another. It’s why someone won’t step foot inside of a Burger King.

But is it something deeper? Brand loyalty exists when a company is able to make an emotional connection with a consumer beyond the artificial product. Bluntly, brand loyalty is achieved when product A elicits feeling B.

For example, my loyalty to Dunkin Donuts stems from memories, fantastic memories, that just so happen to be associated with the brand. I remember, vividly, one Sunday—I had to have still been in high school at the oldest—my father and I going to a New England Patriots football game in the frigid cold. We left early in the morning, a grey haze over everything, and empty roads.

We went through the drive through at Dunkin Donuts, I got a hot chocolate and a donut and my father got a coffee, and we spent the drive enjoying our hot beverages and talking about anything we could think of. I don’t believe we stayed the entire game because it was just too cold, but that’s besides the point.

Dunkin Donuts created a brand loyalist out of me that day because whenever I see their logo, or purchase their product, I am reminded of great memories. It’s why I won’t buy Starbucks. I have no connection to them.

It’s why you see people with Monster energy drink tattoos and Harley Davidson tattoos. The brands are associated with aspects of the consumer’s lives that truly make them happy, and give them something to be passionate about.

It seems a bit long-winded but it’s of vital importance in today’s marketplace. Name a product and you’ll find dozens, if not hundreds, of competitors all vying for your business (and repeat business!). The brands that are able to build loyalists achieve two distinct results:

Life-long repititive business.

Word of mouth advertising.

If a brand is able to create a loyalist, they have basically created a living, talking, passionate advertisement.

The reason this is so important in today’s growing market is because we have turned into a best-deal-seeking consumer entity. The economy is still reeling so price still trumps actual value in many cases. Everywhere we turn on the internet we can find a better deal under-cutting a previous deal, an unbelievable sale that will end in thirty seconds, etc., etc.

Lauren Maillian Bias, a Forbes marketing contributor, had to this to say about the conflict of online shopping and brand loyalty:

“The Internet enables people to be as leisurely or proactive about researching a purchase as they want before actually making the decision, countless websites offer hard-to-turn-down time sensitive discounts to drive sales, price comparisons are at consumer fingertips, and ‘flash sales’ perpetuate an online shopping trend encouraging fickle consumer buying behavior in today’s market.”

This is an excellent point as outside of a few brands, I, myself, do look for discounts, as we all do. Even so, there are still products I am willing to spend the extra money on, as alluded to earlier, because of that subconscious connection they’ve established.

“The online shopping trend conditions consumers to only make a purchase if there is a deep discount. The result is a value obsessed economy where consumers have no incentive to be loyal to any particular brand.”

In tomorrow’s post, we will go over steps a brand can take to get around the bargain-hunting mindset and establish loyalty in hyper-competitive, cut-throat digital market.

Putting the Bowling Ball in Front of the Bowler

Gone are the days where, as a marketer, you can rely on pasting an advertisement somewhere and hoping you’ll reach your desired audience. Gone are the days where television viewers had to sit anxiously through the commercials and be exposed to the desired content. There is DVR. There are subscription services.

With the internet, there are millions of websites fighting one another. It’s more important than ever to put the right product in front of the consumer.

A trend throughout these posts will be the consistent reminder that digital media, whether mobile or in the traditional sense, is the current and certainly the future marketing landscape. It is more affordable than traditional means of advertising, more user-friendly which means more businesses can control their marketing on their own, and farther reaching.

As this infograhpic shows, the trend is anything but a fad.

Infographic from Infosys

 The more people connected, the more companies are going to flock to the sources of those connections to try and get customers. With the ease of digital advertising as mentioned before, there is very much an over-saturation in just about every market where there are digital brands.

Retail. Wal-Mart. Target. Sears. Kohls. Macy’s. JCPenney’s. K-mart. Amazon.

Music. iTunes. Spotify. Wal-Mart. Target. Amazon.  Slacker radio.

Electronics. Best Buy. Wal-Mart. Target. Amazon. Sears. eBay.

Those were spontaneous examples but one thing is certain: huge retail chains have large market shares in eCommerce, and what they don’t have, is swallowed up by the digital-only behemoths like Amazon. For smaller private businesses, or mid-market niche chains, competing directly with these large foes will spell only disaster. Mass production trumps any other possible advantage.

Except for one. Target marketing.

There is not a necessity to compete with the large retailers if you’re able to efficiently target your specific market. Localized promotions, specified search engine optimization targeting precise keywords and tags for your market, networking with possible related interests to encompass reaching preferred target even if they don’t expect it.

It’s about knowing your customer, knowing their behaviors, their desires, and then putting your message where they’re going to be.