• January 23, 2024

Leading Companies Convert Mega-Expectations to Long-Term Loyalty, Brand Keys Finds

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Meeting or exceeding consumer expectations allows companies "to transmute market-share and loyalty into category and market dominance," Brand Keys Founder and President Robert Passikoff stated in his organization's 27th annual Customer Loyalty Engagement Index (CLEI) assessments.

Companies that do so are "loyalty juggernauts...of such overwhelming economic force that...makes them far more powerful than universal awareness alone," he said.

This applies to all sectors and categories, according to Passikoff.

This year's Loyalty Juggernauts included the following companies with percentages indicating their ability to meet expectations:

  • Apparel: Levi Strauss (93 percent).
  • Athletic shoes: Nike (89 percent).
  • Department stores: T.J. Maxx (79 percent).
  • Discount: Walmart (82 percent).
  • Dollar discount: Dollar Tree (90 percent).
  • Home repair: Home Depot (90 percent).
  • Natural markets: Trader Joe's (91 percent).
  • On-line Payments: PayPal (94 percent).
  • On-Line Shoes: Zappos (90 percent).
  • On-Line: Amazon (96 percent).
  • Pharmacy: CVS (88 percent).
  • Price Clubs: Costco (89 percent).
  • Shipping: UPS (89 percent).
  • Sporting Goods: Dick's (92 percent).

Specifically in the tech and electronics category, the Loyalty Juggernauts included the following:

  • File sharing: Dropbox (91 percent).
  • Headphones: Apple (91 percent).
  • Laptop: Samsung (88 percent).
  • Tablet: Apple (94 percent).
  • Video games: FIFA 23 and Hogwarts Legacy (87 percent).
  • Printers: HP (83 percent).
  • E-Reader: Kindle (86 percent).
  • Multi-function printer/coper: Konica Minolta (90 percent).
  • Flat-screen TV: Samsung (93 percent).
  • Smartphone: Apple (95 percent).
  • Instant messaging: WhatsApp (88 percent).

In the digital and online category, the following companies were named juggernauts:

  • AI: ChatGPT (96 percent).
  • Messaging: WhatsApp (92 percent).
  • Online Brokerage: Schwab & Vanguard (89 percent).
  • Online Music: Spotify (92 percent).
  • Online Travel: Expedia (88 percent).
  • Search: Google (94 percent).
  • Social Networking: TikTok (89 percent).
  • Streaming Video: Netflix (85 percent).
  • Ticket Sales: Ticketmaster (84 percent).
  • Video Conferencing: Zoom Meeting (85 percent).
  • Wireless Provider: AT&T Wireless (89 percent).

"The loyalty paradigm has changed dramatically since the Cola Wars of the '70s," Passikoff said, noting that loyalty and consumer choice don't come down to one-or-the-other options. Today's loyalty bottom-line comes down to consumers' deepest expectations and how they feel which brand measures up best.

"Customer behavior and brand loyalty are now almost entirely governed by emotional values related to expectations, and expectations grow constantly," Passikoff said.

This year's index also makes it clear that consumers will not simply settle. Their emotional expectations are the hardest to measure, but that is why they are the most valuable, according to Passikoff.

IIn this year's survey, customer expectations increased 45 percent, he added, but companies have only kept up on average by 9 percent. Loyalty Juggernauts, on the other hand, reduce that gap up to 50 percent, thereby virtually guaranteeing ongoing and consistent customer loyalty.

Being a Loyalty Juggernaut, moves companies beyond primacy-of-product, distribution, ad budgets, even pricing. Being a Loyalty Juggernaut essentially commands category leadership, according to Passikoff. "The ability to meet those very high consumer expectations better than the competition acts like the super glue of loyalty," he stated. "Brands create a virtually unbreakable bond with customers"

"Identify what consumers expect [and then] create strategies, advertising, and experiences that meet those expectations, and your brand can transform into a Loyalty Juggernaut. Customers will be six times more likely to engage, buy and buy again. They are six times more likely to think of you first, pay more attention to your marketing and social networking activities, and actively engage with your brand," Passikoff added. "That's the real payoff: blockbuster category leadership and more effective marketing.

A few 2024 economic facts substantiate the cost-and-effort effectiveness of brand loyalty strategies. They include the following:

  • It costs 16 times more to recruit a new customer than keep an existing one.
  • A 5 percent increase in loyalty lifts lifetime profits per customer as much as 78 percent.
  • A 5 percent loyalty increase is equal to a 12 percent to 21 percent across-the-board cost reduction program.

"Real loyalty isn't as nebulous as you might think," Passikoff suggested. "Unfortunately, it isn't something that just visits itself upon your brand. It's not awareness, not satisfaction. It isn't something you find on a 10-point scale. Those metrics only allow brands to bask in mediocrity.

"Loyalty is more complex in the same way the consumer and marketplace have become more complex. Loyalty is the consumer-to-brand bond, the bridge between emotional engagement and ensuring future purchases. From a measurement perspective it's the degree to which a brand meets expectations that consumers hold for the Ideal product or service in its category. It's the ultimate answer to the question: Do you know what consumers truly desire and how well does your brand deliver on those expectations?"

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