Are brand loyalty and positioning still relevant?

Ashish Mishra presents his view on this question.

Last week, I had the privilege of being the opening speaker for the Marketers' Excellence Conference by afaqs. I was impressed with the simplicity and the honesty of the subjects chosen. Understandably they bore the imprint of Sreekant Khandekar, the man behind the event. The conference stayed away from the formula of lining up some standard speaker brands and relied on what such meets should – raising some fundamental questions to drive a foundational reset in the thinking of businesses and brands.

Some pivotal subjects were questioned, as they should be – Are loyalty and positioning, the cornerstones of brands and businesses still relevant? Aren’t the hectic downstream outreaches, influencing & promotions, with their performance marketing obsession, only causing a muddle, wastefulness and inefficiencies as they are mostly not backed by any understanding of the strategic upstream pivots?

The subject I shared views on was about the death of loyalty. And how do we understand it instead of fatalistically bemoaning it like many lazy and irrelevant marketers?

For the first time since the Industrial Revolution, people's expectations are changing faster than the fastest businesses.

People are more informed, connected and demanding than ever before, asthe result of a number of forces that are likely to continue to reshape the way categories evolve, businesses compete, and people choose and, therefore, the way brands are built and grown.

End of competitive advantage

In the words of Columbia School Professor Rita Gunther McGrath, “We used to think of the competitive environment as one of punctuated equilibrium, where there were long periods of stability between disruptions. Now the disruptions are coming closer and closer together. The competitive environment is in perpetual motion… attractive opportunities are more visible to more players, and the resources needed to go after them are more available, too.”

Abundance of choice

In global markets, choices – both in B2B and B2C environments – are increasing, and are literally at our fingertips. Even if customers know, trust or even love a brand, exploring and trying new options has never been cheaper and quicker. This creates an erosion of loyalty as we currently understand it, whereby brands must keep on addressing customers’ desire for what’s new and what’s next.

Speed of adoption

The speed of innovation has certainly increased significantly, but what has also risen exponentially is the rate at which innovation gets adopted. Ecosystems have the power to propagate and scale the adoption of new technologies to millions of customers at speeds never seen before.

Shorter feedback loops

Smart use of data and artificial intelligence have set the scene for what is, in many cases, a virtually instant, as well as a constant, feedback loop between customer behaviour and product innovation. As Amazon founder Jeff Bezos points out, “One thing I love about customers is that they are divinely discontent, their expectations are never static… they always go up. Yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’. I see that cycle of improvement happening at a faster rate than ever before.”

Shifting frames of reference

Consumers’ frames of reference are shifting.

The expectation of Uber’s immediacy, Spotify’s cornucopia and Netflix’s intimacy ripples across every aspect of life and line of business, raising the threshold of what’s good enough.

Expecting a mortgage to be approved in a few minutes is no longer unreasonable.

Shrugging off the Loyalty Cross 

Individualistic people and societies of today are rejecting morbid relationships due to social, familial, or financial obligations. People are now testing relationships before committing, and when these pre-tested relationships falter, they feel free to move on. Similarly, brands can no longer expect loyalty simply because they offer security or trust in quality, durability, price-offs, or even great ads and packs.

In the world of consumer products, brands like Tesla and Apple continue to capture imaginations not just through quality but by constantly innovating for the changing needs on the one hand and sharing a strong meaning system with their users. Progressive brands now engage in new acts of leadership that resolve our simmering new conflicts. Personal, socio-cultural or global. And walk the talk.

Patagonia's founder relinquished his personal wealth to demonstrate his brand’s commitment to creating a better planet. TikTok has transformed social media, creating new trends and constantly evolving to meet the desires of its audience. Peloton provides not just fitness solutions but a sense of community and mental well-being. Warby Parker offers stylish eyewear with a social mission, appealing to those who want their purchases to have a positive impact.

Netflix customizes viewing recommendations, making users feel understood and valued. Brands that sustain loyalty are those that earn it through sustained excitement, trust, and respect.

So is loyalty, the venerated virtue, anti-evolutionary and irrelevant now? Loyalty cannot be an expectation anymore but only an outcome and it may not be sustainable at all. Perhaps not be all that good it's made out to be. People still flogging it may merely be a case of justifying the bad and the inefficient.

In business, and in life. 

The author is CEO, Interbrand India and South Asia.