The Paradox Of Brand Loyalty...

paradox of brand loyalty.jpg

Brand loyalty.

There's been a lot of commentary recently on its decline, culminating in the article Twilight of the Brands in The New Yorker.

At the same time, there's contrary evidence of brand loyalty that can sometimes verge on idolatry, while some established brands (e.g. Toyota) have come back strongly from major crises.

What can explain this paradox?

Certainly, major brands are under pressure. The largest brands across food, beverage, household products and personal care have lost share over the last few years, while a multitude of smaller brands have grown. Recent reports on the teenage fashion market reveal a similar picture, with the market share of the leading brands declining.

Perhaps the answer to this paradox comes back to a simple truth about brand loyalty. While every brand has a version of the 20% of loyal customers who account for 80% of sales, in reality there are two very distinct groups among that 20%. First, there's the customers who find the brand useful in their lives, and feel an emotional connection to it. In some small way, it's a part of who they are. These are the real brand loyalists. 
But second, there's also a group who find the brand useful, but feel no emotional attachment. They're better thought of as acquaintances rather than loyalists. While their spend and frequency of purchase are similar to loyal customers, if a better alternative comes along or the brand lets them down, they're more likely to jump ship. And in today's connected world, where information and  opinions on alternative brands are almost instantly available, these brand acquaintances are more at risk than ever before.

Consequently, although brands are under pressure, it may not signal a decline in real brand loyalty, but rather the higher risk of losing these acquaintances. 

In such circumstances, there's never been a greater need for brands to inspire the loyalty and passion of their customers...

   ( What Every Marketer Dreams Of…Loyal Brands )