Brand loyalty is under threat; how to keep it intact?

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, refers to a customer’s faithfulness to a company in the face of any temptation — be that discounts, easy availability, or other perks. But here’s the thing: the internet is teeming with choices for online shoppers, each one sweetened with all kinds of perks. These could be quick delivery, free delivery, discounts, or cashbacks. A 2018 survey by Accenture found that almost 70% of Indian consumers don't see much difference between brands.

Searches for a product on any e-commerce marketplace result in customers getting options from 20-30 different unknown brands that are priced considerably less than the leading brands in that category. This means, brand loyalty might be fading as options increase because shoppers just want the best deal for their money and time.

Therefore, 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! Marketers’ Excellence Conference.

Interbrand publishes annual reports on the most valued brands. Mishra, who helms Interbrand in India, therefore knows a thing or two about what makes brands valuable, including loyalty. He began by identifying the inherent problem with how brand loyalty is perceived and defined: “The problem with the definition of loyalty is that it is an expectation, whereas it has transitioned into becoming an outcome.”

Other than the abundance of choice and the end of competitive advantage, it is changing frames of reference that are impacting brand loyalty, he said. “People may expect the experience that Spotify and Netflix offer 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 which are legacy brands. They have earned their place in the consumer’s mind but need to keep fighting to retain their market share in the face of new brands and formulations that are flooding the market. Jain identified a few factors that can help in retaining relevance among consumers — product innovations and an omnichannel retail approach.

And how about large appliances? Are they immune to the fickleness of the consumer? Especially if a customer has had good experience with a large appliance for a long duration of time, are they more likely to go back to the same brand when they need to replace the appliance?

Rathi of Godrej Appliances said that while an appliance brand might fare better than other brands in terms of brand loyalty if the customer has had a good experience, it is important to remember that a customer returns to replace a product after a long period of time. During this time, the market may have changed, and the customer themselves would have new priorities and requirements. “Loyalty will give an appliance brand a position in the consideration set when the customer is looking for a new product to buy,” she said. And it is for these reasons Rathi said customer experience and loyalty go hand-in-hand.

Krishnan, who spoke about loyalty in the hospitality sector, quoted author Maya Angelou to emphasise the value of customer experience in the context of 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.”

Observing that brand loyalty is a lot like human relationships, she said that if a brand wants to build a loyalty moat, it has to make the consumer feel special at every touchpoint. Krishnan also made no bones about the role of brand loyalty in retaining customers. She said, “A brand that does not invest in brand loyalty is saying goodbye to its future market share.”

The panellists also gave some advice to young brands that are seeking to carve out a little piece of the market for themselves. They suggested that young brands invest in building empathy and not just over-index on performance marketing, build a strong differentiation, offer consistent customer experience, and learn from failures.

All the panellists also deliberated on the role of social media and loyalty programmes in earning loyalty. The session was a true masterclass in brand loyalty in the digital era. Catch the entire panel discussion here.