Is the Concept of Brand Loyalty Dying?
By: Jayson Demers
Tags: Marketing, Branding, Branding Strategy, Content Strategy, Online Marketing

Photo by davisco on Unsplash

Brand loyalty: the tendency for customers to favor one brand, consistently, above its competitors for goods and services, even when new purchasing opportunities expose themselves. Brand loyalty and customer retention go hand-in-hand, and are profitable goals for businesses to target. After all, attracting new customers with higher brand visibility is nice, but unless they stick around, you’re only going to see a short-term boost in revenue.

Brand loyalty was common several decades ago, as consumers put their faith in specific businesses to handle their needs in multiple categories — they consistently bought vehicles from the same manufacturers, and got groceries from the same stores. But is the concept of brand loyalty dying? Have consumers lost the desire to remain loyal to individual brands?

The Idea

There is some evidence to suggest that brand loyalty is dying — for example, 90 percent of common household goods brands are losing market share in certain low-growth categories. And logically, it makes sense that brand loyalty would be dying, for the following reasons:

· The information age. Thanks to the internet, consumers have access to businesses all over the world. They have more choices than ever before, and more information to make those choices, so it’s only natural to assume they’d start choosing less expensive, more convenient products over products produced by their favorite companies.

· The changing nature of work. The American landscape of work is also shifting; instead of working for one company your entire life, you’re more likely to make multiple career switches. Self-employment has also been rising consistently as more people try to avoid working for major corporations. This lowers the importance of loyalty to a population, at least hypothetically.

· Corporate distrust. Finally, Americans trust corporations less than ever before, and that missing trust may be preventing them from investing too heavily in any one big business.

Recent Research: Two Types of Brand Loyalty

However, recent research done by Facebook suggests that brand loyalty is alive and well. The company surveyed 14,700 adults in the United States, examining patterns of behavior across multiple different verticals. Across the board, 77 percent of consumers have the tendency to return to their favorite brands over and over again. However, those 77 percent seem to be split into two main categories:

· Brand loyalists make up 37 percent of the population. They make repeat purchases and are truly “loyal” to their favorite brands, meaning they would not switch given an opportunity like lower prices or more convenient access.

· Repeat purchases make up the remaining 40 percent, and represent people who make purchases at the same brands, frequently, but only because they give them an optimal experience. Given lower prices or more convenience, they would have no problem switching brands.

Brand loyalty isn’t dead, but it has diversified. Brand loyalists are driven by emotions, at least to some degree, when going back to their favorite companies, while the repeat purchasers are driven solely by function. Obviously, the emotional ties are stronger and harder to break, but as long as you can appeal to both categories, you’ll be able to retain a hypothetical 77 percent of your customers.

Do you think that this 77 percent belongs to mostly older generations, with the majority of impulse-driven, information-age-born millennials bouncing from brand to brand? Actually, the opposite is true; millennials seem to be more loyal to brands than any other generation. This is thanks, in part, to their interactions with brands on social media, and their high regard for company values like corporate social responsibility.

Driving More Brand Loyalty

Brand loyalty is neither a dead nor a dying concept, so how can you increase it for your brand, specifically?

· Personality. First, understand that people don’t forge relationships with companies as easily as they do with other people. Millennials are frequent brand loyalists because they have personal, meaningful engagements with brands online. If you want to inspire that kind of loyalty from your customers, you need to be prepared to give a similarly personal experience. Have real conversations with your customers, and try to address their unique individual needs whenever you can.

· Loyalty programs. Loyalty programs can also be an effective way to encourage repeat purchasers (and start fostering the emotions necessary to recruit brand loyalists). Essentially, you’ll offer your customers rewards — including discounts and freebies — for buying more things from your brand. Just be choosy about what you provide in your loyalty program — a surprising 78 percent of Americans end up abandoning loyalty programs after they sign up. You need to make it worth their time if you want them to stick around.

· Reliability. Next, remember that people choose brands consistently when they want to have a consistent experience. You need to give them that reliably consistent experience if you want them to keep coming back. That means the quality of your products, the quality of your service, and even your brand voice needs to be carefully controlled for all your customers.

· Brand communities. Finally, foster better brand associations and memories by developing interpersonal communities around your brand. These can include things like online forums, meetups, or even social groups connected to your brand. Social connections are easier to foster than brand connections, but your brand will earn the benefits here.

Brand loyalty is not a lost concept, nor is it likely to disappear anytime soon. Brand loyalty is necessarily different today than it was even a decade ago, but with the proper understanding and the right approach, any business can secure more loyalty from its customers.

For more content like this, be sure to check out my podcast, The Entrepreneur Cast!