Sunday, 13 January 2013

Is brand loyalty still alive?

According to a 2012 study by Ernst & Young, brand loyalty is influential in developing markets but diminishing in Western nations, where consumers are willing to switch brands. A new UK shopper survey by Bain & Company and Kantar Worldpanel concludes: On average, 50% of a brand’s ‘loyal’ users will not be with them the following year.

Yet brand loyalty is still alive. Consider that 96% of UK adults are members of at least one loyalty programme. Even if these customers buy only occasionally, they're interested enough to enroll--and therefore represent significant opportunity for brands that make the effort to connect by:
  • Providing tiers to reward higher loyalty. Virgin Atlantic Airways offers red, silver and gold reward levels for frequent travelers. Tier points depend on the type of ticket purchased (Upper Class, etc) and the length of the flight (going to Australia earns more points than trans-Atlantic). This way, all members can feel rewarded in some way for their loyalty and those who are close to the next tier may be motivated to move up by consolidating their travels with Virgin.
  • Engaging and rewarding brand fans. Domino's discounts pizzas and other menu items each time a particular hashtag is retweeted on Twitter. This means brand fans have to be watching the Domino's Twitter feed and spring into action with the hashtag. The reward--lower prices--lasts for a very limited time, which drives immediate purchasing.
  • Personalising the programme and access choices. It's a multichannel world, with customers using all kinds of devices when and where they please. Marketers are using 'Big Data' to dig into customer info, understand preferences and customise programme details and/or rewards. Tablet and mobile access are the norm, so marketers must be sure their communications look good on these screens, too.
  • Gamification. It doesn't have to be Angry Birds or Bubble Witch Saga. Gamification simply makes loyalty programmes more fun, more challenging and more satisfying. Who doesn't want to win or at least move up a level?