BLAME THE BUSINESS, NOT THE CUSTOMERS – 3 OBSERVATIONS
There is so much talk these days about the demise of brand loyalty. There are those who seem to think that brand loyalty is a nothing but a distant memory – often blaming this phenomenon on increased price consciousness.
The fact that brand loyalty has diminished is well established. While a large proportion of markets remain brand loyal, at least in selected product categories, research has shown a decline in brand loyalty over recent years. At the same time, businesses have reported increased price sensitivity.
While a correlation seems to exist here, I would caution against the jumping to the conclusion that causation has been established.
I would argue that businesses are far more responsible for the decline in brand loyalty than consumers. I would also argue that they are more responsible for increases in price sensitivity than the economy is.
More and more, I see businesses marketing commodities. When they market commodities, there will be little, if any, brand loyalty. Rather, there will be a higher level of price sensitivity. Plain brand products in supermarkets (generally produced by the big brands) are a good example of this. Plain brand or home brand products are not differentiated, and encourage price sensitivity.
More and more, I see businesses promoting the price of products and services well ahead of the physical attributes that make them more attractive to the target market. They pay little, if any, attention to establishing the values of their organisation, and even less to establishing a match between the organisation and its primary target market.
More and more, I see businesses paying very little attention to ensuring that they have the right staff and investing in training to ensure that staff members live and communicate brand values in everything they do and say. As a result, organisations are less capable of delivering their brand with the consistency required to establish a brand.
More and more, I see businesses continuing to rely on advertising to communicate their brand, and whilst maintaining a social media presence, failing to use it effectively to build their brand. They adhere to a view, which is less valid than ever, that branding is all about advertising.
More and more, I see businesses failing to differentiate on a tangible basis. Consumers increasingly see through superficial differentiation, and where they see no differentiation, they increasingly see a commodity.
Loyalty to many brands is as strong as ever. Just ask Apple, Goolge, Microsoft, Mercedes, Ikea, Coca Cola and Zara. Some of these are relatively new brands and others are well established. All of them understand the value of branding, and apply the critical principles of branding, including:
- Really understanding their market and reflecting that understanding at every level
- Standing for something and having values that match those of the primary target market
- Ensuring that their staff understand, live by, and reflect their values day in and day out
- Using whatever media is available to manage consumer expectations
- Delivering with consistency (including in terms of their innovation)
Addressing these issues requires a longer-term view, however, short-term sales seem to be the primary focus of most businesses.
- Brand loyalty is alive and well.
- Business and not consumers are responsible for the decline in brand loyalty.
- Short thinking and a focus on short-term sales are the biggest killers of brand loyalty.