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Brand Loyalty: The Great Marketing Mirage?

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For the past few days, we have been thinking a lot over the concept of brand loyalty.

In today’s world of choice abundance when customers are highly comparative and flirtatious, brand loyalty seems like a difficult construct.

What is happening here? How are the paradigms changing?

So for this edition of FreeFlowing we invited our friend Sharan, a seasoned marketer, to share his take on brand loyalty.

Sharan is a growth consultant to emerging FMCG businesses. He is the founder of Vitral Brand Expertise, which specializes in accelerating brands from ₹50 crores to ₹500 crores in revenue profitably. With close to 2 decades in the industry, Sharan previously worked with Henkel, Cadbury / Mondelez, Reckitt & Godrej Consumer, in various roles across the world.

Over to Sharan for his take on brand loyalty…

#1 Understanding Loyalty

The term itself sounds so heavy and serious, as if pledging allegiance to a king, country or cause. Do we really expect consumers to demonstrate this level of devotion to mere brands? Truth be told, consumers don’t even think about brands so much. Their life does not revolve around brands as much as we want them to.

Consumers are pragmatists who are looking for bang for their buck and not an emotional partnership. If at all we are to speak of loyalty, shouldn’t it be from the brands to the master who is paying for the product or service?

#2 Old World Order

In the past, the markets were less saturated, and consumer choices were relatively limited. Brands like the Ambassador car and BPL electronics were synonymous with their respective industries. However, what could have been perceived as loyalty was more a function of limited choices and habitual purchasing than any emotional attachment.

People moving away from Ambassador cars in a hurry the moment they had the choice of other options is testimony to the fragility of this kind of ‘loyalty’ forced by lack of choice in the face of innovation and change in market dynamics.

#3 Brand Polygamy

In today’s market, where choice is abundant and access to information is ubiquitous, consumer behaviour has changed drastically. They are more experimental and seek variety and novelty at every corner. The perceived decline in brand loyalty is not about consumers becoming fickle but a response to a more dynamic market.

Take, for example, the rise of D2C brands in the personal care space. Brands like Mama Earth & Wow have given traditional brands a run for their money simply because they had a better and more relatable story to tell and products that could live up to the promise of their narratives.

#4 Importance of Omnipresence

Brands can no longer afford to be channel specific. They need to be omnipresent. Being top of mind is crucial, but being available at every point of sale is even more crucial. Else, any mental availability that is created only goes to waste. Take Mama Earth & Wow again. They nailed the online personal care game, thriving during the pandemic while bigger players lagged. But now, as shoppers return offline, their absence in physical stores is enough reason for consumers to defect. Again.

#5 Rethinking Retention

Brand loyalty is, in effect, customer retention. By retention, I don’t mean bombarding customers with ads or spamming their inboxes. It’s about delivering on promises, reducing friction in repeat purchases, and offering such compelling value that customers can’t help but return.

Amazon Prime is a great example of this. They provide such outsized value, that it has become almost ridiculous for online shoppers not to have a Prime account. Having failed to do this is probably why some of the iconic brands from our childhood have ceased to exist.

#6 The Continuous Engagement Model

To ensure customer retention, brands must look for ways to continuously engage with consumers. This is not about just fulfilling a promise but remaining relevant in the consumers’ life beyond the transaction. Creating content is the ideal way to drive relevance with consumers today.

In my opinion, nobody does it better than LEGO; through their interactive and community-driven platforms, their stories and brand partnerships, they don’t just keep consumers engaged and invested in the brand’s ecosystem but also constantly give them reasons to buy repeatedly.

#7 The Ecosystem Trap

One way of ‘commanding’ loyalty is by creating a web of products and services so interconnected, they make a customer’s life a series of happy coincidences. Take Apple, for instance. Sure, there’s badge value, but it’s more than just that. It’s about the experience. An iPhone is great on its own, but paired with a Mac? Pure synergy. An iPad might seem pricey next to other tablets, but if you’re already in the Apple family, chances are, you won’t think of another brand.

These ecosystems, when done right, are like fortresses, keeping competition at bay. It’s like Super-Apps, same idea, different area. But, and it’s a big but, to keep customers in your garden, each product needs to be a stand-alone delight, delivering incremental joy with every additional purchase. Simply parachuting a wannabe ‘super-app’ is not going to cut it, but that’s a conversation for another day.

#8 From Loyalty to Engagement

This shift from loyalty to engagement and retention reflects the realities of today’s market for most categories. Brands need to focus on making every interaction meaningful and convenient.

Seamless user experiences, personalised interactions, and consistent value delivery are key. For example, Cadbury Dairy Milk Silk’s activations around Valentine’s Day have been so consistent and full of cute mush that the brand has become synonymous with the day.

#9 What about brand tattoos?

And then, there are those peculiar cases – individuals who tattoo brand logos on their bodies. These rare fans are not the norm but exceptions to the rule. They are drawn to narratives so compelling and experiences so consistently delightful that they elevate the brand to a cult-like status.

But these brand evangelists are outliers, not the average consumer. Harley Davidson’s fanatics are called Hogs. But they quickly cease to be just customers of the brand and move beyond, to become a part of the brand narrative to bring and retain new customers by demonstrating their fanaticism.

Conclusion

So, is brand loyalty dead? Not necessarily. It has evolved into a more nuanced relationship, where convenience, value, and experience play pivotal roles. Loyalty was never a quid pro quo system and never will be. Think of your loyalty to your friends. It isn’t transactional, but born of a genuine emotional bond.

Those brands that focus on loyalty points based on transactions will continue to be gamed by their customers. While, brands that adapt to reality and focus on strategic engagement and meaningful interactions are more likely to thrive. Building loyalty for your brand, is about taking a holistic approach that balances emotional connection with disproportionate value.

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