paper on brand loyalty

There's probably an article in 'how brand licensing increases brand loyalty', just haven't had time to write it yet. In the meantime here are some conclusions from an excellent paper on the subject by Michele Blake:

Brand loyalty is increasingly earned by building intensity of desire.

Some industry commentators propose that there is only one measure really worth tracking and that is – how many of a company’s customers would actively recommend their products to others.

True loyalty increasingly requires companies to think about creating desire and involving emotion. But consumers are increasingly uninterested in developing relationships with brands.

Today, in developed markets at least, consumers are quite literally spoilt for choice, leading to “choice paralysis,” and making people less satisfied with the choices they do eventually make. Also consumers feel stressed trying to regain control over their schedules: they just have less time for brands.

In addition, they are generally more resistant to marketing and advertising. This is partly a protective response to the sheer volume of advertising messages to whichthey are exposed and partly due to their increasing cynicism about those messages.They trust less, having had that trust abused in the past.

Income polarization is contributing to polarization in shopping habits, causing brands to lose out to more premium options on the one hand and consumers’ price shopping on the other.

Private label also threatens loyalty as consumers are tempted away from branded products to private label equivalents with their price competitiveness, improved quality, increased innovation, and shelf space advantages.

Consumers are also increasingly substituting takeaway meals and eating out for food and drink bought in supermarkets and prepared at home.

Finally, the retail environment is now a key arena for brand and promotional messages delivered to consumers at the crucial moment at shelf-front when the final brand choice is made, meaning loyalty is in the balance until the very last moment a shopper puts an item in their basket.

Building loyalty is also about innovations in marketing. One trend is streamlined portfolios, where often it is the umbrella brands, rather than the individual products that are promoted – often via a ‘lighthouse’ idea, making the brand stand for something above and beyond product. For example, successful brands are taking positions reflecting current trends for increased corporate responsibility (e.g.Fairtrade, organic production, health and wellness and so on).

Canned, frozen and chilled foods suffer the lowest consumer loyalty.

Private label is the greatest threat to loyalty, followed by unplanned shopping as consumers are tempted away by lower price private label alternatives and/ or are influenced to buy another brand (or private label) at the shelf front. Loyalty towards private label economy and standard ranges will slip in the future.

66.0% and 58.3% of respondents rate innovation and premiumization respectively,as ‘very good for’ or ‘best for’ brand loyalty, whilst improving product experienceand generating positive word-of-mouth are the most effective strategies inpromoting brand loyalty.

It is true today and will continue to be true that customers will only remain loyal to brands – assuming they have more than one available choice – if those brands continue to meet their expectations, their needs and wants. Increasingly aware of their greater range of options and better informed about those options, customers are becoming more demanding and generally less loyal, so companies have to work harder than ever to achieve even the same levels of loyalty.

The most successful companies focus on that brand or those brands where the company has the best chance for success, fully committing the organization – from the most senior levels down – to the chosen brand(s) and their customers.

To engender greater loyalty, companies will want to explore how they could more holistically solve the customer’s ‘problem’ through innovation. The most successful brands go beyond practical benefits to deliver an idea that the customer can buy into.

See the full paper here