Great Brands = Loyal Customers

Asking people what makes a great brand is like asking them to describe their favorite music, or why they love their children, their dog, or the ocean. One quickly makes a sharp left off the road of logic into the high grasses of emotion. That's because great brands have something beyond primacy of product or service, high levels of awareness, satisfaction, and ubiquitous distribution.

 

Great brands have meaning. They have a differentiated position that sets them apart from their competition. They stand for something in the minds of consumers. But above all that, great brands have established a bond — primarily emotional — between themselves and consumers. This bond has another name: brand loyalty.

 

"Brand loyalty" is a term that has been bandied about the marketing world for the past decade — at least. Virtually all marketers acknowledge that brand loyalty is a desirable quality, though definitions of it are highly varied. The most common definition employs "loyalty" as a surrogate for satisfaction, a customer's past behavior that is thought to tell a brand little about future behavior.

 

Brand loyalty was always desirable, but it was not as critical in the past as it is today. The convergence of marketing, production, and satisfaction initiatives has produced a large set of companies that are doing it "right," all of which "satisfy" their customers. But today, "right" is not "great," and "right" does not translate into brand loyalty . . . and brands today want true loyalty more than ever before.

 

Brand loyalty is a wonderfully precise model for predicting consumer behavior and boosting profits and future revenue streams. Not only are there marketing efficiencies and economies available to brands that engender high levels of loyalty, but real brand loyalty is a leading indicator of positive consumer attitudes and behavior, and, most important, real bottom-line profitability. Generally speaking — and depending on the category in which the brand competes — one can make the following assertions about the economies resulting from having a brand that has established a real loyalty bond with its consumers:

 

• It costs 7 to 10 times more to recruit a new customer than it does to keep an existing one.

• An increase in customer loyalty of only 5 percent can lift lifetime profits per customer as much as 95 percent.

• In some sectors, an increase in loyalty of merely 2 percent can be the equivalent of a 10 percent across-the-board cost reduction program.

 

Real brand loyalty always results in positive consumer behavior in the marketplace. Loyalty effects vary by category, of course, but positive consumer behavior always shows up in higher levels of attention (as opposed to awareness) paid to brand communications and messaging. Other results are higher levels of engagement, more positive imagery, higher propensity to consider, and, most important, more actual sales.
For example, an increase in brand loyalty of only 5 percent results in the following:



• For network TV brands, consumers are 12 percent more likely to watch shows.

• Wireless handset and PDA brands find that consumers are 14 percent more likely to buy the brand again versus a competitor's.
  

• For over-the-counter drug brands, consumers are 6 percent more likely to offer a higher opinion regarding the brand.
  

• Web-based service brands have found that consumers are 15 percent more likely to use them versus similar offerings.

 

Consumer electronic brands that have increased brand loyalty by 5 percent have seen sales increase by 12 percent. We nod our collective heads about brand loyalty, but here's a simple way of understanding its true bottom line: it's "The Rule of Six," and it goes like this:

 

 

Consumers who are loyal to a brand are six times more likely to:

• Buy your products.

• Buy more of your products, buy more of your products more often, and/or trade up when buying (more of) your products.

• Recommend your products to friends, family, and colleagues.

• Invest in publicly traded companies.

• Rebuff competitive offers, especially those that are price-based.

• Give your brand the benefit of the doubt in touch circumstances or questionable situations.

   

Can't really argue with brand outcomes like those. And with real brand-loyalty metrics, marketers can actually measure the degree to which consumers engage with an existing product, a new product, a concept, ad strategic positioning, or a marketing or advertising campaign — all on the basis of how well the brand is able to bridge the gap between marketing research and human psychology.

 

Great brands understand the critical need to measure the drivers that underlie human motivation and identify the characteristics that inspire people to choose a brand as part of their lifestyle. Brand success is as much about measuring emotions as it is about interpreting the conscious, rational feelings that contribute to choice, and acknowledging that emotional component is the first step in forging a real brand-loyalty bond — making the magic of human emotion the foundation of brand creation and brand marketing.

 

Great brands with loyal customers have an understanding of the position a brand could believably occupy in the consumers' minds. Having a fix on brand loyalty allows great brands to determine and understand what consumers are willing to believe about the brand.

 

Great brands with high degrees of loyalty understand the real, motivating forces of consumers rather than the considered and amended opinions of the purely rational. The reason? The values that great brands have been able to develop always go beyond the practical issues of product performance or rational benefits and much, much further than the so-called emotional aspects of brand image, brand essence, and brand personality.

 

Great brands remain great because they do not rest on their laurels or take their customers for granted. This greater marketing imperative has taken hold in the past decade as consumers have seized more and more control and, some might argue, the high ground from brand-controlled information distribution, communication engagement, and persuasion ploys. Consumer commentary — in the form of blogs, instant messages, tweets, texts, and social network postings — have become a meaningful synthesis of real customer values and expectations, with often higher levels of resonance among the customer base. Therein lies the secret of brand loyalty.

 

Great brands that are able to address real and meaningful values in ways that resonate with consumers will always be able to successfully — and profitably — bond with consumers. By doing that, great brands participate in an informed brand action play that makes sense to the people on the brand side of the equation and accurately tracks what people on the consumer side are actually doing with their loyalty and their dollars.

 

To paraphrase Winston Churchill, when it comes to brands, the price of greatness is ultimately brand loyalty — something a brand must never, never, never give up.