Brand Keys to Release Brand Tracking Database
Brand Keys, a provider of brand loyalty and emotional customer engagement research, is set to release a database of predictive brand loyalty metrics.
"After 25 years conducting the Customer Loyalty and Engagement Index, it seemed an apt time to allow brands access to where brand loyalty has come from and, more important, where it's going," said Robert Passikoff, Brand Keys' founder and president. "Loyalty--how to earn it, grow it, and keep it--will be one of the most important performance indicators that brands measure in the next decade."
In 2021, adjusted for a new century and a new generation of consumers, loyalty matters even more:, he explained, noting that it costs 13 to 18 times more to recruit a new customer than to keep an existing one, an increase in loyalty of 5 percent can result in a boost in lifetime profits per customer of as much as 78 percent, and an increase in customer loyalty of only 2 percent is equivalent to a 15 percent across-the-board cost reduction program.
The Brand Keys database will contain as many as 4.3 million evaluations and will include loyalty and engagement analytics for 1,624 brands in 142 categories. Brand assessments have been independently-validated and correlate highly with positive, in-market consumer behavior. Brand Keys' first Loyalty Index was conducted in 1997 and assessments have been conducted annually ever since.
Passikoff also notes that the consumer decision-making process has become more emotional than rational over the past 25 years. In 1997, the process was 60 percent rational and 40 percent emotional. Twenty years later, the ratio shifted to become 80 percent emotional and 20 percent rational.
"When we measure emotional, we're talking about psychological properties, not just imagery. And, while there are still categories where rational thought dominates, there are fewer-and-fewer each year," Passikoff said.
Shifts in the consumer decision-making process have identified the following three, critical KLIs:
- Emotional vs. Rational: Is what drives brand engagement, behavior and loyalty in your category more or less emotional or rational? What should your brand leverage to increase loyalty?
- Expectations: Consumers are unwilling to settle for what exists as expectations have increased faster than companies can keep up. What's the gap between what consumers really desire (their Ideal and metaphorical yardstick) and what they see and, more critically, feel your company delivers? That gap identifies opportunities to build loyalty. Companies that best meet consumer expectations always see increased levels of positive consumer behavior and profitability.
- Value Ownership: Which particular values does or can your company own? Value-ownership today is a brand-state that goes well beyond 20th century differentiation to define category leaders.
The research also found that the COVID-19 pandemic influenced category shifts, brand strobing, and how consumers shop.
"An example of pre-COVID expectations for airline safety (a critical driver of loyalty) could be summarized as the plane takes off, the plane doesn't fall out of the sky, the plane lands, and if it's on-time and security didn't let anyone bring on a gun that was a bonus," Passikoff, said. Add COVID-19 into the airline safety equation and loyalty metrics can identify which drivers will shift in the category and how companies can most effectively deal with those shifts. The ability to anticipate and meet expectations are key determinants of consumer loyalty, marketing success, and brand profitability.
"Categories, like consumers, have evolved over the years. Brand Keys tracked SLR Cameras until cameras were integrated into mobile phones, and mobile phones until they became smartphones," Passikoff added. "MySpace, the first social media site, was established in 2004 so we added the social networking category. TikTok appeared and was included in 2016. We'll add Meta when it becomes a reality. The Brand Keys data base has been updated and enhanced every year since 1997."
Over the years, Brand Keys has seen brands strobe in and out of categories.
"Brand Keys does not use a pre-determined brand list. A brand is only evaluated if a statistically reliable sample of consumer-respondents identify as customers. The pattern of list appearances, disappearances, and re-appearances can be extraordinarily informative," Passikoff explained.
And how consumers shop has not remained static either. The order of category loyalty drivers, describing how consumers view, compare, buy, and remain loyal, change annually. So do the attributes, benefits, and values that make up the components of each loyalty driver and the percentage-contribution that each value makes to engagement and loyalty. Understanding how these changes have occurred and how and when they will occur have strategic and tactical benefits to brand planners, advertising and communication development, and consumer outreach and experience.
For the past 24 years, Brand Keys has interviewed consumers, 16 to 65 years of age from the nine U.S. census regions, who self-selected categories in which they are consumers and brands for which they are customers to craft the annual Customer Loyalty Engagement Index. Brand Keys uses an independently-validated research methodology, including The Advertising Research Foundation's First Opinion Review that fuses emotional and rational aspects of categories, identifies four category-specific path-to-purchase behavioral loyalty drivers, identifies expectations consumers hold for each driver, the values that form the components of each driver, and their percent-contribution to engagement, loyalty, and profitability. A combination of psychological inquiry and statistical analyses accounts for 96 percent of the variance, has a test/re-test reliability of 0.93, and produces results generalizable at the 95 percent confidence level.