Loyalty—what does it mean? The dictionary defines it thus: Loyalty implies a faithfulness that is steadfast in the face of any temptation to renounce, desert, or betray.
Brand loyalty, therefore, is a customer’s faithfulness to a company in the face of any temptation — that may be discounts, easy availability, or other perks. The thing is this: online shoppers see choices aplenty and are lured with all kinds of perks. It could be quick delivery, free delivery, discounts, or cashbacks. A survey done by Accenture in 2018 showed that almost 70 percent of Indian consumers do not find much difference between brands.
Searches for any product in an e-commerce marketplace prompt a customer with 20-30 different new brands unknown to the customer, which come at much lower costs vis-a-vis the leading products in that category. It would mean that brand loyalty might be ebbing with the increase of opportunities as shopping gets to be for the best bang for the buck.
So, we want to understand: is this a secular decline, or are there categories and geographies where consumers are immune to the temptation of other brands? I spoke to Ashish Mishra, CEO, Interbrand; Swati Rathi, CMO, Godrej Appliances; Saurabh Jain, CMO, Zydus Wellness and Deepa Krishnan, head – marketing, India and Southwest Asia, Hyatt and went right back to the basics of brand loyalty at a recent panel discussion at the afaqs!.
Interbrand comes out with annual reports on the most valued brands. Mishra, being the head of Interbrand in India, thus knows a thing or two about what makes brands valuable, including loyalty. He began by identifying the inherent problem with how people perceived and defined brand loyalty: “The problem with the definition of loyalty is that it is an expectation, whereas it has transitioned into becoming an outcome.
Beyond a surfeit of choices, he said, it is changing frames of reference that is denting brand loyalty and the root cause for the demise of any competitive advantage. “People may demand the experience which Spotify and Netflix are giving from their home loan app or website.”
Jain manages a wide portfolio of health and wellness brands ranging from Complan and Glucon-D to SugarFree — all of them legacy brands. They have captured consumer mind space but now have to keep fighting to retain share of the market as the market is getting flooded with newer brands and formulations on a daily basis. Jain highlighted a couple of factors that can help in retaining relevance among consumers, including continuous product innovation and establishment of an omnipresence through an omnichannel approach in retail.
And what about the big appliances? Do they, and are they not subject to the whims of the consumer? Is a customer more likely to go back to the same brand when they need to replace a large appliance that they had in their house for a good period of time and had had good experience with it over that period of time?
Rathi of Godrej Appliances said that though a product brand may outdo other appliance brands in terms of brand stickiness if the customer has had a good experience, it is also important to remember that a customer returns to replace a product after a long, long period of time. By the time this happens, a lot would have changed about the market, not to mention that the customer, too, will have new priorities and requirements. She said, “Loyalty will give an appliance brand a position in the consideration set when the customer is looking for a new product to buy.” Rathi said that it is for these reasons that customer experience and loyalty go hand-in-hand.
Speaking to the same issue of loyalty in the hospitality industry, Krishnan cited author Maya Angelou in exemplifying how this underscores the centrality of the customer experience in brand loyalty: “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel”.
She said brand loyalty is a lot like human relationships: if a brand wants to have a loyalty moat, it needs to make the consumer feel special at each and every touchpoint. She also did not mince words on the role of brand loyalty in holding on to a particular consumer. She had said, “A brand which does not invest in brand loyalty is saying good bye to its future market share.
The panellists also had a piece of advice they tried to give young brands that are fighting hard for a chunk of the market: first, they advised investment in building empathy, not just over-indexed on performance marketing; secondly, to strongly differentiate; thirdly, offer a consistent customer experience; and finally, to learn from failures.
All panellists deliberated on the role of social media and loyalty programmes in earning loyalty. This really was a session—a master class in brand loyalty in the digital era.
