Is brand loyalty dead? Salmat head on personalisation and the data issue
Marketers and consumers are on different pages when it comes to channel choice and brand loyalty, says Salmat’s Andrew Lane.
Last month saw the release of the second annual Salmat Marketing Report, focusing on brand loyalty and consumer purchasing habits in 2018. The Report found that brand loyalty among Australian consumers is low, with only one in five declaring loyalty to one or two brands.
Head of sales and client engagement, Andrew Lane, says a fiercely competitive market is to blame for the lack of loyalty. Lane even admits himself that his loyalty to a certain technology company has dwindled in difficult price conditions.
Moreover, the report found that marketers are struggling to leverage technology in building brand loyalty, 86% of marketers agree that technological advancements help collect better customer insights and customer analytics, but 68% found it challenging to use the same technology to help create lasting one-on-one relationships with customers.
Marketing spoke to Lane to dive further into the details of the Report and find out what exactly marketers can be doing to develop brand loyalty strategies that work.
Marketing: Has brand loyalty seen a decline or has it always been something marketers struggle with?
Andrew Lane: Before, audiences have been very loyal to a brand no matter what, but it has got more difficult for brands to maintain a level of brand loyalty. A key part in the findings surrounded the power of brand loyalty and how it’s becoming harder and harder to attain as time goes on.
Myself for example. I’ve always been a key advocate of the Apple brand, and would buy new Apple products indiscriminately. This year, for the first time I considered a non-Apple device when it started to get to nearly $2000 for the latest iPhone. It gets to a point where even those who are really loyal to a brand can be swayed if they feel like price or product quality isn’t quite up to their expectations anymore – be that from a value point of view or even a quality of service point of view.
Price and increasing competition have certainly swayed people’s loyalty somewhat. That’s why it’s becoming increasingly harder for brands to keep customers loyal when there’s so much competition and variety available.
For FMCG brands, for example, is brand loyalty enough to deter from price attraction?
That’s probably one of the areas where it’s actually hardest to maintain that loyalty. When you’re talking about a premium product, it’s slightly easier to keep a loyal customer. But if you’re talking about the difference between very similar products from different brands, I know for a fact that I can be swayed to a different brand.
Of I’m walking through the supermarket and I see the product I’m looking for is on sale – say I’m looking for deodorant or soap – even if it’s a brand that I haven’t used before, if I see it at half price I can very easily be swayed into compromising my brand loyalty. Category certainly plays a role in brand loyalty retention.
What are marketers getting wrong in terms of developing customer relationships?
The biggest thing that stuck out for me in this report was the apparent disconnect between the channels that marketers are focusing on, and the channels that consumers say they value the most.
We ask a simple question: ‘what are the top channels that consumers use to inform their purchasing decision?’ And ‘what are the top channels that marketers have used in the last 12 months?’
We found that there was only one channel that was consistent on that list of six: the brand’s website.
Marketers invest time, effort and energy heavily into social media, email marketing, newspaper advertising etc. But consumers are saying that they are actually not the key channels that influence their decisions or purchase behaviour.
What they take notice of are things like recommendations from family and friends, search engine results, TV advertising and in-store collateral.
So that was certainly very interesting to see, and I think is a good lesson for marketers to get back to basics and really understand which key channels are going to help influence that customer decision.
What role does personalisation play in developing brand loyalty?
It has really just become an expectation. I think it stands out more when you receive a non-personalised approach rather than one that is personalised. And audiences can actually develop a negative perception of the brand when that happens, because it feels like the brand doesn’t want to have that one-to-one connection with you – like they’re just treating you like a number.
It’s hugely important for brands to able to put the right information, products and services in front of the right customers, rather than that ‘one size fits all’ approach that marketing used to be. It can even be somewhat damaging to a brand and to customers’ loyalty to that brand if you get personalisation wrong.
Does that mean that brand loyalty is now an issue of data for marketers?
That is part of it. If we don’t understand our customers, or perspective customers, how can we market to them in an effective way? Certainly, the better we understand our customers, the better we can create a customer experience for each particular individual and the more likely we are to drive loyalty to that brand.
I wouldn’t by any means say that brand loyalty is completely dead, but there are so many more factors now that can influence whether a consumer stays loyal to a brand or not – and that clear understanding of consumer behaviour, being able to deliver that personalised approach, is very noticeable when it doesn’t happen well.
Gone are the days of being able to sell everything to everyone. We have got to understand who the target audience is for a particular product and brand and make sure that our product and our marketing meets the customer’s expectations.
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