The Growing Consumer Disloyalty

Advertising people who ignore research are as dangerous as generals who ignore decodes of enemy signals." There's plenty of truth to this quote by the late advertising magnate David Ogilvy, and it doesn't only apply to advertisers, but also to any executive responsible for creating or facilitating a company's direction. This is why we've crafted our special report this month, called Generation Nation, in which the editors of CRM magazine evaluate the biggest consumer trends, broken out by generational cohorts. There's one particularly important finding in these pages that flies in the face of conventional wisdom: There isn't much difference across generations when it comes to consumer loyalty. Published reports have labeled Generation Y as fiercely disloyal, claiming its access to Web information and online communities empowers members of this cohort to research vendors in a market and switch to a competitor if they're unhappy with their existing vendor. Today, this is only a partial truth. In fact, according to a study by Yankelovich cited in the feature story "Wild & Crazy," by Assistant Editor Colin Beasty, 33 percent of consumers older than 50 agree it's "risky" to buy an unfamiliar brand. This statistic alone isn't too shocking; however, what's interesting is that 36 percent of those surveyed between the ages of 16 and 34 find it risky to buy an unfamiliar brand. Simply put, younger consumers are more willing, albeit only slightly more willing, to stick with a trusted brand. What's going on here? Have consumer strategists been reading Gen Y wrong? My guess is, no. Gen Y is the first generation to grow up digital, so members of this cohort are very comfortable using the Internet for research. When presented with more options than previous generations, it's understandable that loyalty among members of this generation will diminish. So the pundits aren't wrong about Gen Y, but a recent tipping point has occurred--older generations, recognizing the Internet's value, have significantly decreased the technology adoption gap between younger and older generations. And as the Internet is responsible for the increased disloyalty among younger consumers, it stands to reason that it would have the same effect on older generations. When it comes to demographics and psychographics, technology is blurring some of the generational divides. Location is no longer a hindrance to consumers if they can purchase online. And as I mentioned earlier, loyalty is affected when consumers are presented with more options. As a result, companies will need to combine demographic and psychographic data with behavioral data to get a clearer picture of consumers. *** Hard work should be recognized. That's why I'm taking this opportunity to acknowledge a couple of promotions at CRM magazine. Alison Lowander has been promoted from managing editor to senior managing editor. Colin Beasty has jumped from editorial assistant to assistant editor. They share the rest of the staff's enthusiasm and commitment to bringing value to every issue of CRM magazine. Congratulations to both of them on their promotions. David Myron Editorial Director dmyron@infotoday.com