Is brand loyalty dead? The question is a lot more complicated than you might think.
Historically, brand loyalty has gone through some changes over time, adapting to both issues of product quality and to issues of consumer preference. Consumer preferences are constantly changing, and one of the biggest shifts these days is in the ease of buying things online and having them delivered to your door.
Customers have the world at their fingertips and it is shifting the landscape of brand loyalty forever.
What Is Brand Loyalty?
Before the 1950s, brand loyalty was all about who had the best product. If your company made the best tires, you could easily corner the market with repeat customers. After the 1950s, product quality went up across the board, so it was no longer enough to have a good-quality product. This is when companies started to differentiate themselves with marketing and advertising, playing up their best qualities to capture those still quality-minded consumers.
By the 1960s it was all about the advertising campaigns and jingles, and by the 1980s marketers needed a new trick to keep customers coming back.
This was when loyalty programs entered the scene. At first they started of with wildly popular airline miles and car rental clubs, pushing one man to purchase 12,000 pudding cups to earn himself 1.2 million airline miles. But today there are 29 loyalty program memberships per household and people are getting burned out. Twenty-three percent of people say they have a negative reaction or no reaction at all to loyalty program efforts.
A major shift is taking place in the brand loyalty landscape, and it centers around the internet.
How the Internet Is Switching Things Up
Twenty years ago, ecommerce was still in its infancy. As the internet grew and then was followed by the mobile internet, people began to expect a certain kind of customer service when they purchased things online. After all, clicking on one website is just as easy as clicking on another website, so how do you keep customers coming back or choosing your product over the competition?
Customers of all generations are still brand loyal, but millennials in particular retract their loyalty more quickly than previous generations. They also have greater expectations for brands than previous generations have had. A survey by programmatic marketing company MediaMath (registration required) found a third of millennials will retract their brand loyalty if a brand is found to have poor business practices, while nearly 40 percent will switch to a newer more attractive product.
Customers Have the Power
Before the internet, customers were limited to whatever choices were physically available in the store. But now customers can get whatever they want whenever they want from all over the world. Brand loyalty has shifted to customer loyalty, and the brands with the biggest market share are the ones with the best customer service and business practices.
This is a good thing for consumers because it translates into more and better options and a greater motivation toward excellent customer service. And it’s a great thing for brands because it means customer service can set you apart, and if you are rolling out a new product today’s consumers are more likely to try it.
Learn more about the new brand loyalty from this infographic:
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