There are some brands we are stuck on, others we’re stuck with. Brands we’re stuck on are those where we’ve developed a relationship out of our own free will (Apple, Starbucks, Zappos). Brands we’re stuck with are those where we’ve become trapped through contracts (phone carriers, cable companies), switching costs (banks, software) or incentives (airlines via their loyalty programs).
If consumer loyalty is measured by repeat purchases alone, both sets of brands look pretty similar. But throw in some measures around sentiment and you’ll see a clear difference between the loved and the unloved. Consumers’ feelings about the two types of brands couldn’t be more different.
As marketers it’s important that we know what kind of consumer loyalty we are getting and act accordingly. Brands that are loved can tap into the wells of existing consumer passion and spread that love around. If you ask passionate consumers for their help, they will give it and become even more engaged as a result.
Brands that are not loved need to be more careful especially when it comes to their relationship with their consumers and how to engage with them. These consumers, given the opportunity, are more likely to vent their frustrations than show support. Marketing activities for these brands are often more about damage control and placating consumers so they don’t try and escape. That can come in the form of reselling the benefits that locked the consumers in to begin with (See all the great places you can go with these miles you’ve earned), building even higher walls to make sure the captive consumers don’t get out (Now, triple miles with every flight), breaking down the walls of the competitors (Switch today and we’ll pay the penalty fees) or adding cognitive dissonance by pointing out some good things that they do (Here’s how we’ve given back to the community).
Often we don’t leave a favorite brand because of anything dramatic. In fact, quite the opposite: the experiences we have quietly fade to the point where there’s less reasons to stay than to go. One day the food isn’t quite as good as it was, the movies on the flight haven’t been changed in a while, the person we spoke with just now was that little bit less warm, the changes in the insurance policy are more inflexible and the biscuits in the pack are smaller and taste different.
Brands make these changes with the best of intentions for the business. They do it to save money, to introduce a shortcut, to be more efficient. It’s just a little change right, a little reduction – think of it as portion control. No-one will notice. And most people don’t.
Unfortunately, the people who do notice are the people who have been loyal to the brand. They know where this is heading. Not today perhaps. Not tomorrow. But at some point, this is going to be yet another formulated cheap experience. They know because it’s happened to them before. Many times before.
Making people more interested in your brand is one challenge. Making them more loyal is quite another.
The widespread availability of plate glass in the second half of the 19th century gave retail store owners the technology required to begin constructing windows that ran the full length of their street-fronts. According to Zada, it didn’t take long for department stores in particular to spot the advantages of showing off what they had inside. In 1874, Macy’s upped the ante by creating a holiday window display featuring porcelain dolls from around the world. As major retailers gravitated to major cities and competition between them increased, the displays in their stores also became more elaborate.
140 years on from that first holiday window display, retailers are still looking for ways to entice people to visit – except now the windows are digital as well as physical and the stores too are just as likely to be online. And in this world of the increasingly mobile consumer, timing is everything according to this study. Just as display artists sought to stop people in their tracks and to lure them inside, moments-based marketers are using offers to tempt online passers-by their way. The study found that consumers respond to rewards (no surprises there) but the real shift in inclination comes when those rewards arrive at a moment when people are most engaged and receptive. Think of this as an “experience halo” in effect. While you’re here. Using the energy of an experience to propel buyers into making a further commitment in exchange for something that feels good right now.
It sounds like a big data dream. Track the behavior patterns so that you know where people are likely to be and what they are likely to be doing, then deliver offers, rewards and ideas that ensure everyone gets a little uplift at the time they feel most inclined. Maybe that’s a tactical challenge for marketing in the years ahead. Not just reaching buyers. But connecting with them at a time when they are most impulsive.
These findings from research of the ways we go about our lives have confirmed people are nowhere near as random as previously thought. In point of fact, after tracking more than 100,000 mobile phone users over a period of six months, the clear conclusion from this research if you’re a brand is that people mostly visit a limited number of locations time and time again. Customer loyalty pays. Literally.
What’s interesting to note, given that we live in this much heralded era of mobility, is that most people also move around over very small distances – five to ten kilometers. No surprise then that this infographic shows a pizza-chain within a 10-mile radius across the United States.
Some people, of course, range much further, but even then, they stick to remarkably similar patterns, once again tending to return to the same places over and over again. So customer loyalty is also limited. For the most part, it operates within finite parameters.
But a recent study of grocery buying habits also reveals something stranger, and contradictory. Even though we generally return to the same places and those places are usually close by, we will travel much further than seems reasonable if the incentive to do so is great enough. For example, while we may like our fast food close, people in cities will travel miles to shop for food from their favorite outlet, even if they have a supermarket or corner store nearby. Watch the videos and see for yourself. Customer loyalty defies logic.
If you’re a business that depends on physical traffic, here are three takeaways around customer loyalty that I think are worth noting.
Most good marketers know how to gain top of mind. Good marketers are adept at widening the funnel at the top end. They’ve good at introducing new lines, new variants, new dimensions – in order to attract new customers. They know how to work with their agencies and their internal teams to fashion a story that intrigues to draw an audience. They know how to weight media flights and craft promotions that persuade consumers to call or to visit. They’ve learned to charm. Competition’s taught them to do that well.
That used to be their biggest challenge.
Some would argue of course that’s never been more difficult, but, ironically, it’s not the biggest challenge marketers face anymore.
Now the biggest challenge facing marketers is gaining and retaining front of heart: sustaining the appeal for those who already believe in the face of ongoing enticement from determined competitors.
That’s because, between initial purchase and continued purchase, a vital change takes place. What consumers need at first is awareness, authenticity, excitement and a sense of gain. The sales funnel works well to get them through the obstacles to first buy.
But after that comes the need for affirmed faith. Once consumers are passionate about a brand, they need different things. They certainly don’t need to be sold to anymore – at least not like they were sold to at first. Now they need to be reminded that they’re making the right choice every time they buy, and they need to feel rewarded for the decision to lock in.
Problem is, for so many brands there’s no real sense of that reward. They either ignore loyal consumers. Or smother them. They group them as stats. Or they don’t segment them at all.
These to my mind are four of the biggest mistakes that marketers make that lead to a loss of loyalty: