Brand loyalty is a key strategy for most organizations. The segment of customers or donors who are supportive, engaged, and loyal often have an outsized impact on a company or non-profit organization’s success. Many academic and market research studies have shown the impact of brand loyalty on purchasing and a company’s bottom line. In evaluating our own conjoint analysis studies that measure the importance of different factors in choosing a service or product, we can see that 70% of the time brand is one of the top three factors driving a buyer’s choice (in both consumer and B2B markets).
Unfortunately, the dramatic events of the last year have created conditions that have affected brand loyalty. Brand Keys, an annual survey of Customer Loyalty among high-profile consumer brands such as Taco Bell and Motel 6, found that customer expectations increased 22% in 2020, while most brands managed to increase their loyalty scores by only 7%. Another report by the consulting firm McKinsey found that 75% of American shoppers have altered a brand preference.
There is some disagreement on whether or not people will return to their old buying behaviors as the pandemic ends and people are comfortable returning to their prior activities. Ketchum Analytics conducted a study that concluded 62% of people who have changed a brand preference will make that a permanent change. On the other hand, the CEO of Brand Keys believes that many people who have switched brands due to access, cost, or convenience will return to their preferences once the crisis subsides. No matter which opinion seems more relevant to your industry, it is always good practice to continually monitor and evaluate your brand’s standing so you know how to make adjustments and invest your resources.
Effective ways to measure brand loyalty
A common way to look at brand loyalty is to ask whether a person would recommend the product to others. Sometimes this is a direct question and sometimes it is inferred in a customer satisfaction rating such as the Net Promoter Score. While these approaches have value, they can be somewhat limited in scope. In the B2B world, many professionals are not allowed to make recommendations representing their firm. Some people are simply uncomfortable telling others what to do, even if asked.
If you are asking customers about this practice, think about other ways to discern their brand loyalty. As an example, you might ask how much they agree with statements such as these:
I tell people positive things about this company.
I have posted a positive comment or review of this organization on social media.
Brand loyalty is tied to a customer’s emotional engagement, even for B2B products and services. To better understand their level of connection and engagement, you might ask how much they agree with statements such as these:
I am proud to own or use this company’s products/services.
This company cares about meeting my needs.
Supporting this organization makes me feel good.
Instead of simply asking which brand(s) someone prefers to purchase, determine the strength of your brand in the market by asking about preference on a response scale that ranges from “I would never buy this brand under any circumstances” to “I love this brand and buy it whenever possible.”
When measuring brand, make sure you also investigate perceptions that are known to contribute to customer loyalty. For example, a study from Wharton’s Baker Retailing Center found that brand loyalty is connected to how companies stay transparent to their customers and how they deal with issues. This finding resonates with studies for our clients that reveal it is not service or product issues that impact a brand the most, but how these issues are resolved.
Don’t stop at gathering data and insights on your own brand – make sure you gain measurements on competitors and emerging alternatives to truly understand your strengths and weaknesses.
Many companies have customer loyalty programs. This is a good time to reassess its elements. Find out what your customers are looking for now. Added convenience? Appreciation? Ideas and solutions? Ways to save money? Connection to others? Adjust your program to meet those new needs and you’ll strengthen your customer retention.
The most important thing you can do right now for your brand is to evaluate if and how it has changed over the last year – how is it currently perceived relevant to current buyer needs, expectations, behaviors, and emotions? These insights are key to understanding what drives brand loyalty – and will be key to your survival and growth.
If you would like to have a conversation about the best ways to evaluate your brand, get in touch. We are happy to share our perspective, no obligation. You can reach Linda Kuster, President, Vernon Research Group, at email@example.com or 319-364-7278, x7104.
For more information on brand-related research, click to our brand page – http://www.vernonresearch.com/branding-research/