Marketers Need a New Definition of 'Loyalty'

"Package-Goods Brands Lose Loyalists in Recession."  So reads the article headline on AdAge.com today.  The gist of the article is that as the recession has bore on, brand loyalty has suffered, with over half of the consumers who said they were highly loyal to a brand in 2007 becoming significantly less so a year later.

The article points out that brands like Coca-Cola, J.M. Smuckers', Folgers, and Thomas' English Muffins came out much better - they "kept more than 60% of their highly loyal consumers from 2007; Coke and Thomas' retained more than three-quarters."

Conclusions from the article: the more brands spent, the better they fared; and losing brand loyalists is costly.

So, here's the problem I have with all this.  The actual definition of loyal is:

"unswerving in allegiance"

Notice the first word - UNSWERVING.  When half of your 'loyalists' desert you when times get rough, it is hard to consider them loyal in the first place.  They might have been friends, but you certainly weren't married. 

In fact, given that brands that spent more fared better, one can begin to question whether loyalty truly exists in brand relationships.  Many studies have pointed out that your most 'loyal' consumers are quite often your least profitable.  This is because 'loyalty' is often confused with 'bribery.' 

Here's a hint - if your 'loyal' consumers jump ship based on price or promotions, they were never loyal to begin with.  Your relationship with them was a fleeting one of convenience and affordability/value and they dumped you as soon as something better/more convenience/more affordable/more valuable came along.

You would never talk about how many of your loyal friends ditched you when you were going through a problem period.  The very fact that they are loyal would imply that they stuck with you through thick and thin, better and worse, etc...

So don't fool yourself by talking about your consumers/customers as loyal just because they keep buying from you (mostly on deal, coupon, or special offers).  Your TRULY loyal consumers are those who won't switch based on price or deals - they are the ones who somehow have created a bond with your brand that is strong enough to weather the ups and downs of relationships. 

There are lots of studies, thoughts and opinions on 'brand loyalty.'  However, I think that the world of marketing would benefit greatly by a change of terms in this field, as the word 'loyalty' implies things about your consumers that, most often, are far from the truth...

Comments

[Tom Asacker]

Great post Len. I hope people will soon see just how naked the Emperor of everything brand and marketing really is, and then hire a child to help them.

What was once referred to as loyalty — back in the heyday of mass marketing — was simply
habitual buying patterns and limited choice cultivated by smart marketers with mega spending on advertising and control of distribution channels. And to your point, today those same smart marketers have added bribery to the mix. You know, "Buy from me and I’ll give you something for free!" They call those particular tactics Loyalty Reward Programs.

Let's call brand loyalty what it really is and always has been: repeat patronage. There is only one reason why people continue to associate with an organization, and that’s to receive value and a certain feeling, or possibly to avoid one. That’s it! People do not feel any sense of duty or
obligation to soda, jelly, coffee or muffins.