As marketers or small business owners, there is no better vision for our future than amassing a large number of loyal customers.
Strong brands used to rely on those brands to reach customers. Brands stood for something. They signaled to customers the kind of quality and service they could expect. They helped well-established companies fend off smaller rivals, because customers were more likely to go with brands they knew and liked versus taking a chance and trying something new.
Newsflash: that’s not the case anymore
Over the last five years, all indicators point to the fact that brand loyalty is in decline. Consumers are more likely than ever before to shop around, looking for the best value instead of choosing and sticking with a particular brand.
Why is this happening?
Theories abound on why there is such a strong decline in brand loyalty among consumers. I’ve managed to find three lines of thinking that combine to account for this on the aggregate:
- Consumers have more power than they used to. In our digital world, transparency is key. The ability to shop around is greater than it used to be. There is an endless amount of information out there for the savvy consumer, and they’re using to ensure they make the best possible purchasing decisions.
- Companies have eroded trust in the marketplace. It’s no surprise that this recent decline coincides with the recent financial crisis. Large companies in a wide variety of industries have been the perpetrators of great injustices against the public, their customers among them. Why would consumers feel loyalty to specific brands when they don’t feel that same loyalty in exchange.
- The pace of technology puts more pressure on companies to change and evolve. Customers have higher expectations, partially due to the proliferation of technology impacting all facets of their daily lives. Companies that move too slowly let competitors take the lead and risk losing once-loyal customers in the process.
What does it mean?
Loyalty is a two-way street. No longer is it effective or acceptable for companies to spend massive amounts of money on branding, with the hope of adding new customers who plan to stay for life. It just isn’t happening.
Companies need to change the way they think about their brand. They need to change the way they think about their marketing. And they need to change the way that they think about engaging with customers.
It’s not enough anymore to publicly claim that you “put customers first”. You actually have to do it.
That change comes from the top down. It involves a shift in culture that focuses on delivering unmatched customer experiences, in sales, in service, in product design, etc.
Maybe we can’t count on brands ever being as trusted as they once were, or on consumers to ever be as loyal as they once were. But the very best companies, the ones with the biggest upside in this shifting landscape, are those that truly act in the best interest of the marketplace.