How to Develop Brand Loyalty

I’m sitting here, 6 am. On the kitchen table. It’s raining. Well, it is Melbourne. In my Adidas Runners, Bonds Boxers, Hanes T-Shirt, Yarra Trail Pants, Louitt Bay Windcheater, wearing a Swatch watch that’s been the best lucky watch I’ve ever owned. I’m working on a G4 Mac Laptop, carried around in a beaten-up Targus bag. Eating Vegemite on Dairy Soft on toasted Vogels multigrain and drinking Coffex with Rev and Bundaberg sugar. It’s all brands isn’t it? Big ones, small ones. Anyone who tells you brands don’t matter is completely out of touch with modern life.

What can you buy that doesn’t have a brand connection? Water? No. My water comes from Yarra City water, but I could have Origin Water. From the same tap? From the same reservoir? You’d have to question whether the concept of the brand has gone past logic, wouldn’t you? It’s heaven for ad agencies, creating differences out of nothing; building brands.

Which is why ad guys like me always push ‘brand development’ because it means awareness of products, because that awareness creates demand and hence gives clout to companies where they had none. And brands can be sold, for millions. And can be translated across markets. Virgin was a record shop. It’s now an airline, a credit card….it’s about confidence in the quality of the brand itself. The brand matters because that awareness and confidence can make a huge difference to the financial power of a company who owns them and that’s nice for us, because brand marketing means lots of ads and other bits and pieces to make ad agencies busy and hopefully rich. And brands have lots of theories attached to them. Magazines like this are groaning with them. I’ll bet half the articles in this edition (I don’t know, I don’t get to vet other contributors work, more’s the pity) talk brand theory.

The king of all brand theory is the concept of brand loyalty. That someone will remain loyal to a particular make or model come hell or high water. That they’ll keep trundling down to the supermarket from the age of 7 to 77 to fork out their hard earned cash for your Milo or Coke. Stick with your Bank’s saving account their whole life to pay for that Coke.

I kid myself I’m a regular brand experimenter. That I try lots of new things. But in reality I don’t. I experiment with a few. I might try a new type of tooth brush, because the technology seems very sensible, or I might try a new kind of loo paper, cause it seems much softer and thicker and you don’t want the stuff to break and have to wash your hands out of real necessity. But I’m not really a brand slut. I’m more the kind of guy who wonders what it would be like, than the one who goes out and tries every bloody new brand all the time, cause his life isn’t exciting enough. (My life is exciting enough. I can’t keep up with it as it is. Perhaps it’s Alzheimer’s cutting in early.)

Why do I stick with a series of tried brands and only occasionally experiment with a few? Because I’m so damn normal I may as well be the statistic. I get that opinion not from my usual procedure of staring at the ceiling (painted with Dulux paint, by an Oldfield’s Brush) and wondering, but by that old stand-by when you can’t think of anything clever, research. Yes, hours of scanning the web and trolling through old reports lead me to one inescapable conclusion. The population is becoming more brand centric, more loyal, rather than less.

According to a recent British study, over half of consumers now stick to their regular brands. Nearly half of them like to know what they’re getting by buying well-known brands, so they can avoid an over load of information and choice. Brand loyalty has risen since 2001, despite continuous influx of new products. With some 57% of people remaining brand loyal in 2004, up from 47% in 2001.

The public (me included and probably you too) are slowly pulling themselves back into their collective shells and hiding from the noise. All the ads on the streets, the pages and pages of magazine ads, the cars floating around the shopping centers with slogans on them. The web, with pop-ups, draw downs and flash front ends racing at you, trying not to amuse you, not to charm you, not to inform you, but just to beat you up. We don’t want to be yelled at. We’re sick of it. We got enough of that from our Mums when we were kids. We want to be in control, after all, it’s our life. And it’s our money.  And so we are exercising our right to privacy. We’re walking.

The public, God bless their collective, sensible soul, is turning off. The public is seeking solace in the safe brand. It cuts down the thinking time, saves energy for other things. We have other things to do and we just don’t care so much about newness, about benefits, about change. We have too many decisions to make already, without bothering with more of them.

If you regularly went through the supermarket and experimented with new brands, you’d have to be mad. You’d need to read every bloody pack. You’d spend say a minute a pack. That might be another 60 minutes onto an already time-intensive experience, taking the total time to do the shopping to 2 hours. A couple of times a week? In a time-strapped world? You’re kidding.

So we just buy the safe. We experiment a bit, to keep our hand in, but we are tending to go closer and closer towards the known world.

What does this mean to you, New Marketing Manager? Good news? Well, actually, yes. (All news has a two edged sword to it, it depends how you view it.)

If you are new to the job, your task is so much harder. You need more funds. You need a new approach etc. Great – months of briefing agencies, having meetings, generating mind-blowing insights and generally not being judged, because you’ve got such a tough job ahead of you. The most exciting bit of any marketing career.

If you’re old to the job, in a decent company with a fair few big brands, you can feel the warm glow of quiet security. Rest assured you’re probably far less vulnerable than the agency or the market researchers would have you believe. You can relax a bit, knowing that brand loyalty is increasing as fast as global warming – slowly strangling the life out of the little guys by sheer public exhaustion. All you have to do is leave your foot on the heads of your competition by telling the agency to keep beating the drum. If you pick the right company you could almost go on a holiday during the working week.

How does product category matter?

It matters heaps. Low involvements, like washing powder for males or petrol for women, weave between no loyalty, bought just on price, or can be highly brand loyal because the person just doesn’t care to think about it. High involvement purchases, same dichotomy; many people are brand loyal say to their car, while others are the reverse only because they spend all day thinking about it and move according to facts and brand influences.

Who we marketers usually fight for are those in the community who are not brand loyal to that product category at that life stage….

How does age group affect loyalty?

Loyalty does increase with age. Older people are more likely to have certain aspects of their lives off limits. Where experimentation is a necessity, say with mobile phones or internet providers, they may still experiment. But where their purchase patterns can be set and safe, (so they can get on with their lives) they will continue to buy that which is trusted. Not because they want to trust, out of fear, but because they can’t be bothered to waste more time and they don’t give a shit about marketing twaddle. A Daniel Yankelovich (DY) Group survey of 1,299 consumers, 2003 found  70% of consumers in the age segments 39-39 and 55+ place a high significance in brand loyalty.

Interestingly (with the growth of the spending power of baby boomers and their constant drive for ‘self actualization’) the aged-end of the market is actually becoming slightly less brand loyal than it’s predecessors (trying new things, re-inventing themselves) so the pendulum is swinging back a touch, but generally, the older, the more set.

A good experience with a brand at an early stage can last a whole life time.

There is a large proportion of consumers who will stick to the same brand for their entire lives – especially with their choice of newspaper. Up to 43% of consumers will knowingly or coincidentally read the same as their parents.

For example, Australians are less inclined to change banks. ING Direct worked around this because customers don’t need to change their existing banks, their consumers are growing at a rate of 15,000-20,000 per month in all age groups.

(McNair Ingenuity Research, B&T 27, Nov, 2003). ING knew there was resistance, decided not to fight it, but work with it, and bingo.

It’s not just when they leave home, it’s more when they hit 30

When a consumer hit their 30’s, they become brand loyal. As consumers grow older they break away from brands they grew up with and re evaluate their shopping choices. Most interestingly, it’s when they move in with somebody else who they like a lot more than themselves, that they really change brands. “Which soap do you prefer, darling? (As they walk down the super market aisle.) Get the Dove please honey, I want my skin silky smooth for you this evening.. ho ho ho, and get some new razors will you, my legs are feeling prickly…”

It’s not just the kids changing, it’s often the parents

Another brand switching key milestone is when children leave home and parents become empty nesters. The oldies are suddenly free to choose their brands. Do you know how many Dads are happy realizing they don’t need to buy more Sultana Bran cause their son’s gone to live with his girlfriend?

Do you copy your parents?

There is a very strong causal link between a child’s buying behavior and brand loyalty, and their parents.  Toothpaste, banks and coffee hold strong brand loyalty- 30% of respondents (to that DY study) used the same as their parents. Nearly one in five people drive the same car as their parents. For most brand loyal students, their parents introduced them to the products.

16-24 year old consumers in particular look for authenticity. They have been brought up by media and as a result have good filters, they let in authentic and ignore everything else.  Also word of mouth for this younger segment is very important. 80% of respondents in that survey relied on new product information from their peers. 72% of 16-24 year olds surveyed were likely to try new products, in some categories. This propensity for youth to try, is the key reason most marketers target younger markets. But it’s folly in a strategic sense.

Most of us aim at the wrong segment

The theory is that by targeting younger people, you can still communicate with older people. Because everyone wants to be young and young is hip, cool. That younger people are more switchable, on the basis of price and more experimental and faddish. That younger consumers have a higher lifetime value.  Hey, they’ll live longer, so they’ll buy for longer. Here’s the old two edged sword again. If they are more experimental, they are more inclined not to be loyal, so you’re spending all that effort to win them and so is the next company. They’ll race off to the next deal sooner anyway. You’re buying consumers who by definition are not loyal. It’s like having a drug habit – nice feeling for a few hours, but you’ll need to pump in more and more money to get that high; very similar game targeting high churn young customers for mobile phones etc. with call your friends for free the month of October type offers…I’d rather target Dentists or Mothers, but I’m in the business of keeping clients profitable, what would I know?

It’s far better economics to target older more set in their ways customers. Older customers show strong alliance with long-established brands. Over 65’s -65% stick to familiar brands, compared to 47% in the 20-24 age group. Spending in most categories peaks at age 45 to 54. The market who matter is the baby boomers. And they are getting older and richer, with more free time to spend it. And they will spend it how they like, cause they can. While they may be harder to win, as they are less likely to switch and everyone else is targeting youth, they remain much longer as loyalists. I switched from Suzuki to Land Rover 8 years ago and I’ll probably be still driving one in another 10 years. Especially if they offer me say a 50 plus life-time guaranteed discount…

The arguments above are all well and good, but the real reason marketers target youth is cause that’s all most of you are given in creative. Ad agencies are dominated by groovy young people who haven’t gone off yet to a real job in sales or marketing. These kids write ads and aim their thought patterns in the main at their own age group. They just can’t help it.

How to work with existing brand loyalties

Use themes that transcend age

We all age. But certain content themes are ageless and some aren’t. Eg. Poker and gambling can be aimed at 24 and 44 year old markets. Almost everyone likes the idea of surfing, even if they don’t do it, because it’s been a cool thing to do since the 1950’s. If you’re aiming at people over 60 though, use old footage of big ‘Malibu’ boards or current footage of oldies doing it. But bowls? Or Golf? Some things are just automatically associated with old age. If you want to hit a wide audience, avoid them.

Make appeals to general brand values

Way too much focus is placed on whether a brand is marketed to the right age group, rather than worrying about whether the right values are being acknowledged. It’s much better to identify your core brand values – why the customers really buy your product or service, then focus on that in your ads.

Confirm to core loyalists why they are loyalists

Make sure your ads re-enforce why they started buying your product in the first place – especially with older loyalists.

Target personality types and bond

It’s much better for a brand to reflect how its customers see themselves. If they are conservative, give them sensible sounding arguments, clichéd images and steady-as-she-goes copy. If they are friendly types, show family, meeting people. If they are loners, show individuals in meaningful places like the beach, a mountain top… If you don’t know who they are, do the research. If you must target just by age, gender etc., do it with sympathy for their values and relevance to their situation, while  maintaining your brand’s key messages and reason to be. It’s not that hard. Westpac’s current illustrative campaign, while kind of low-key, balances all those things. That flatness you feel, is because most of us prefer more edgy stuff that appeals to our particular personality types, but not everyone’s.

Ensure media buys really reflect target market

Choose appropriate media by factors other than age ie. Interests, education, occupation, gender. This will be hard to explain to most media reps, so don’t bother. They work on the figures given them on demographics and cost per thousand – you’ll only end up having an argument. But you should consider environment and editorial style, it makes a big difference. A Sex in the City viewer is thinking clothes, shoes. She’s highly switchable to new brands of them, according to what she sees on the show.  She’s in brand switching mode. She’s also likely to be receptive to other new brands at the same time, say for lipsticks, computers (how many Macs have Apple sold because Carrie writes on one?) or even breakfast cereals? How would sales go for Special K if we saw Amanda eating a bowlful, the morning after?

Niche if you dare

Where you know only a select few will ever want your product, you can throw out bits of the above. But many is the novice who thinks only one group decide things. Almost all purchase decisions, bar magazines and some fashion items, have a number of decision makers. Think about toothpaste say, or a family car.

Attract new loyalists by giving incentives to become so

No-body buys anything without trial, obviously. If you have to get them over the line, do deals, promotions, but make especially sure they really reflect the core brand values you know your customers want, not just silly discounts or two for one deals etc. In food and other HVPG’s, sample when you can.

Aim at the older, better heeled customers – not young experimenters

In general, its better to target the older segment of the public than the younger because not only do they have more money, once you’ve won them over they are more likely to stay as customers, This doesn’t help if your in the youth clothing market, but if you’re in supermarkets, white goods, banking ….

CRM

The great, unplumbed promise of the words Customer Relationship Management is to hold onto them – giving you brand loyalty. Ask your supplier of that ‘service’ how they intend to do it, please.

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