Is brand loyalty dead?
For as long as there have been businesses, there have been loyal customers. Nowadays, with heightened competition and many more channels of connection, it has become increasingly harder for brands to maintain a strong relationship to a large proportion of their customers.
It is generally accepted that through a rise in highly saturated markets, there is less brand loyalty amongst consumers. And we can’t really blame them, with so many ways to connect, engage and communicate with new brands why would a consumer continually stay loyal to a brand which may not be meeting their specific needs as a customer.
Some of the primary tipping points for customers losing brand loyalty are price, increased competition, excessive utilisation of social media and intensive marketing campaigns that end up confusing the current consumer. As is the nature of highly competitive markets, the price will often decrease as competitors are happy to undercut each other’s price in order to secure a transaction, it has been revealed that 41% of Gen X believe that price will have the biggest influence on their loyalty to a brand. However, when it comes to increased competition within a market, nearly 50% of loyal customers are willing to switch to a competitor if they feel their needs are going to be better met.
Some reasons why the ‘death’ of brand loyalty isn’t all that bad include;
- It spurs on a healthy sense of competition within any market and encourages business to be progressive and not content with their position.
- Customers aren’t tied down and feel free to explore existing and emerging brands that better meet their needs.
- Brands are increasingly required to communicate with their customers and make them feel heard and appreciate with any positive or negative feedback they may have.
Brand loyalty is far from being truly dead, however, it is harder to come by, and both ends of the relationship can make or break how effective their connection is. If the customer is easily satisfied with how things are, they’ll remain content and not seek out more efficient and effective alternatives, whilst a customer who actively wants the best product at the best price will happily disregard brand loyalty to get the most out of any transaction. For businesses, they should cherish the heightened necessity to be proactive in their attempt to gain and maintain new customers and use it as fuel to lead their market into the future.
Brand loyalty will continue to experience a rollercoaster of highs and lows, especially when brands are having to compete in a digitally infused and social media bubble. How will brand loyalty look in 20 years from now?