schemes, air miles, these are all bribery, and when the bribe is withdrawn or the novelty wears off, the customer looks elsewhere.
True loyalty does not result from discounting.
Many studies have shown that when consumers buy a discounted product for reasons of price alone, they still yearn to buy the higher priced, big brand name alternative, but money won out this time – just wait until they win the lottery…
When looking at the costs of branding, you should consider the costs of winning loyalty through these kinds of alternatives. What will it cost to keep competitors out through the maintenance of an effective monopoly, to lock customers in through rebates or rewards, or to keep them through continual price discounting?
True loyalty – what is it, and how far can it go?
True loyalty results from the quality of the rela- tionship built between the supplier and the customer. If this involves direct human contact then there are significant opportunities to build loyalty through personal behaviour, but in the absence of that, the brand is the main and most effective repre- sentation of the relationship.
CUSTOMER EXPECTATIONS AND LOYALTY
We will consider two variables that help to determine the customer’s expectations and so help
define the level and type of loyalty they may show for a brand. These are the significance of the purchase to the customer, and the amount of money involved.
Significance and brand awareness
The significance of the brand to the customer results from a number of factors, but perhaps principally the following two: 1) the more complex the rela- tionship the customer has with the brand, repre- sented by the number and variety of the brand interactions, the greater the chance of building long- lasting loyalty; 2) the more the brand can identify with the customer’s pressing issues – getting under their skin – the more chance for building long- lasting loyalty. And the significance of ‘significance’
to awareness and loyalty? Let’s just compare some items of equal expense, but with rather different levels of significance.
A refrigerator versus a cooker. The fridge is just for storing things, while the cooker is for creating things – brand awareness and the significance of branding for cookers is far greater than it is for refrigerators.
A bed versus a hi-fi. A bed is for sleeping, and is covered up for most of its life. The hi-fi is for enter- taining, even for performing, and is on show to all those to be entertained. Bed manufacturers go to great efforts to brand their products, but I challenge you to name three bed brands in the space of time you can name six brands of hi-fi.
The brand manager wishing to increase brand loyalty will do well to examine the relative signifi- cance of the brand, and the number and nature of the
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The significance of significance to brand loyalty
customer interactions. If they can increase those interactions then they have a good chance of increasing the brand’s significance and so the customer’s loyalty.
The brands that inspire the most loyalty are those that are most significant to the customer as a result of their high level of involvement and the impact on their ‘hot spots’. Motor cars have a lot going for them in this regard, involving the customer through a long cycle of interactions, from anticipation, to selection, to purchase, to use, and even on to memory of that use. Reduce the number of interac- tions, reduce the significance to the customer, and loyalty gets harder to win. Some purchases just make it plain difficult to be loyal.
Relative spend
Having considered the significance of the purchase, let us now link that to a second variable – the amount of money spent on the purchase relative to all other expenditure. These two variables form the two axes of a matrix shown in Figure 4.1. I have then suggested some items that I would put in each box of the matrix, based on my own perceptions and expenditure.
You may disagree with my positioning, perhaps for you baked beans are a vital purchase and getting the wrong brand is a minor disaster – perhaps you have children… and this is the whole point about understanding consumer expectations, branding and loyalty. Different groups of consumers have different expectations, and if we wish a brand to be relevant then we have to be targeting the right groups; branding and segmentation, as we shall
Aim to maximize the number of customer interactions to increase your brand’s significance and so win greater loyalty
observe time and again, are quite inseparable.
Rather than using my examples, position some of your own purchases on the matrix and then ask yourself some questions:
• Do you go about purchasing these items in the same way, or differently?
• What do you expect from a product or service positioned in each box?
• What ‘value’ are you seeking?
• How loyal would you be to a brand in each box?
The answers will demonstrate how brand values must be positioned dependent on the consumer’s expectations, and that those expectations depend on how the consumer positions you in their ‘mental map’, as represented by the matrix.
Table 4.1 (page 40) takes the items from the matrix and, based on the value sought by the consumer and their likely level of loyalty, adds a comment on the
Loyalty, based on the brand’s significance and size of expenditure
seeks: seeks:
security assurance and value
gin life insurance
behaves: behaves:
actively loyal enquiringly
seeks: seeks:
an easy choice savings
baked beans petrol
behaves: behaves:
passively loyal promiscuously high
low
low high
relative spend
Figure 4.1 Loyalty, based on the brand’s significance and size of expenditure
significance
The brand as a mark of loyalty 쐽 39
possible branding approach. The good brand acts appropriately for the value sought and the likely level of loyalty. It doesn’t try to force unreasonable loyalty, it acts according to the type of loyalty it can expect, including bribery where necessary.
Brands can of course act to increase their signifi- cance by various means, some more long-lasting than others. For me, Esso and Shell have little to distinguish between them, and attempts to differ- entiate their products through technical claims leave me cold. But if one brand adds a shop to its station, with a cash machine, and clean toilets, then perhaps it will win my loyalty, until the other brand matches it…
Expectations, loyalty and branding
Table 4.1 Expectations, loyalty and branding Item The Consumer Likely Kind Possible
Seeks of Loyalty Branding
Approach gin security actively loyal retain loyalty –
‘confidence’
‘It’s got to be Gordon’s’
baked beans an easy choice passively make loyalty
loyal easy
‘Beanz Meanz Heinz’
life assurance and enquiringly earn loyalty –
insurance value ‘trust’
‘Because life is complicated enough’
petrol savings promiscuously ‘lock in’ Texaco Reward Card:
‘It’s a bribe, but it’s a good bribe.’
Adding to the product element of the brand is often less effective than other actions, and it is also relatively easy to copy. The addition of services can have a greater impact and, for me at least, a longer- lasting loyalty might be built if I were to identify one brand as more environmentally sensitive, or as a more responsible employer – the link between the brand image and the reality of the company behind the brand. But then that’s just me.
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Marketing – its purpose and practice
The brand helps a business to represent, in a single focused definition, what is perhaps the most important purpose of marketing – the pursuit of a