Loyalty Is Growing, But Harder to Sustain
Customer brand loyalty has increased on average 20 percent from 2019 to 2020, according to Brand Keys 25th annual Customer Loyalty Engagement Index.
“Analysts, consulting firms, and research practices that declared brand loyalty dead are talking about a consumer loyalty model that expired in 1990,” noted Robert Passikoff, president of Brand Keys. “Back then, loyalty was a black-and-white issue for consumers. But loyalty didn’t die. Rather, it has evolved in a more complex marketplace with more sophisticated consumers.”
How complex? Eighty-five percent of the path-to-purchase category loyalty drivers have new, consumer-generated configurations, and the attribute, benefit, and value components that form the components of those drivers have grown more complex, more connected, and more emotional, the firm contends.
Top 20 Brands With 2020 Loyalty Focus
- Chick-fil-A (+28%)
- Zara (+27%)
- WhatApp (+25%)
- Amazon (+23%)
- Netflix (+23%)
- Dunkin? (+22%)
- Konica Minolta (+22%)
- Vans (+21%)
- Hyundai (+21%)
- MSNBC (+21%)
- Avis (+20%)
- Discover (+20%)
- PayPal (+19%)
- Samsung (+18%)
- Lyft (+18%)
- Apple (+17%)
- Chase (+17%)
- NFL (+16%)
- FOX (+16%)
- Google (+14%)
“Two decades into the 21st Century, the world has more complex brand and mediascapes. It’s more data-rich and technologically intensive. Consumers are more complex, connected, and complicated. They connect with each other before even considering connecting to a brand and assess loyalty relative to how they envision an ideal brand,” Passikoff said.
“It only takes a nanosecond for consumers to note how well a brand is seen to meet their expectations for the path-to-purchase drivers that define behavior toward and fidelity to a brand. That’s the 21st century version of brand loyalty,” Passikoff said. “Brands that can meet consumer expectations will always see higher levels of engagement, loyalty, and sales.
“Marketers who focus on so-called loyalty programs expecting real brand allegiance, totally miss the point” he added.
“Categories and brands are not static,” Passikoff continued. “Brands change, and how consumers view, compare, and buy are governed by the order and level of expectation of the key loyalty drivers in any category.”
Disruptive market forces, technology, innovation, and relentless competition all play a part in how the order of loyalty drivers shift and why consumer-value components become more complex, according to Passikoff, who also notes that “the end results are predominantly driven by consumers’ attitudes and desires, much of which is unarticulated and virtually all of which are emotionally based.”
The companies that best meet consumer expectations always have the most-loyal customers and, not-so-coincidently, the strongest sales and highest profits, he adds.
“Marketers face a three-part challenge to leverage brand loyalty as opposed to relying on legacy point programs” Passikoff said. “First, they need to recognize it is 2020, not 1985, and define loyalty as it applies to today’s consumers and the emerging marketplace. Second, they need to define objectives based on how customers actually view their category and identify what consumers expect, not based on tweet-counts or NPS scores, but on actual loyalty assessments. Finally, marketers need to design tactics that provide emotional brand engagement, not just more devalued points.
“Do all that, and you’ll have more engaged, more loyal customers, which comes hand in hand with increased sales and profits. That’s what real loyalty is all about today. It’s also a pretty good definition of successful marketing,” Passikoff concluded.