To be honest when I first this finding that came from a study, conducted by Ernst & Young who surveyed nearly 25,000 people across 34 different markets around the world, I was somewhat surprised.
I would’ve guessed that number – one quarter, would have been even lower among American consumers when it comes to brand loyalty, especially in today’s trying economic times.
On the whole across all 34 markets brand loyalty checking in just under 40% as a determining factor in making a buying decision, but, that number dropped to just 25% in the US, a highly significant decrease in the number of American consumers who say brand loyalty is something that impacts their buying behavior.
In their findings, Ernst & Young identified five trends which show that “customer behavior has changed beyond recognition.”
Now that line about customer behavior changing beyond recognition is one I surely agree with, yet it’s a fact that I think far too many CMO’s, brand managers, brand marketers, and marketers and advertisers in general still do not accept.
The behavior of a customer/consumer has indeed changed beyond all recognition which means forget what you think you know, forget the past. That’s all gone for good.
Among the five trends they identify is a shift in brand loyalty and it is this “radical transformation of customer behavior” – as the study refers to it, that I think could have the biggest impact on brands, particularly in the western world and especially in the United States.
Is the recession over?
Are we still in the thick of it?
Is there light at the end of the economic tunnel?
I surely don’t have the answers but what I do is there are still plenty of people struggling to make ends meet and as such brand loyalty is taking a back seat to fiscal responsibility, and I’m not sure brand loyalty is ever coming back, at least in the way brands and advertisers are accustomed to.
The study breaks down brand loyalty within given industries and the telecoms of the world scored higher than say the apparel/clothing companies, but the fact remains that in the US, brand loyalty just doesn’t matter that much when push comes to shove.
Not surprisingly price (89%) and quality (82%) scored very high as a factor in a buying decision. These findings are supported by another survey conducted by AYTM — Ask Your Target Market — a leading DIY market research platform.
Their survey asked 2,000 consumers to rank in order of importance the factors which affect why they love a given brand and at the top of the list were price and quality.
The Ernst & Young survey findings also dovetails quite well with the findings of a survey done by comScore last year which revealed the declining number of American consumers who are buying they brand they want vs. what brand is on sale at any given time.
In their survey, comScore queried 1,000 women, who, in my estimation, are the strongest brand ambassadors in the world.
As I wrote in my article in which I went over the comScore findings, “More and more women, AKA those making the purchases, are moving away from brand loyalty and, to use the term mentioned by comScore, are beginning to ‘buy down.’”
So What’s A Brand To Do?
Well, to quote right from the Ernst & Young findings, “Organizations (brands) have to go back to basics and get to know their consumers if they are to develop strong and profitable customer relationships. They must engage in a different type of dialogue, characterized by a new way of listening and talking, in neutral forums governed by different rules. ”
I love this statement and I would point out a few key words from it: “different” and “new.”
Both of these words invoke a very scary, angst-inducing five-letter word that brands and organizations have feared since the beginning of time: change.
The rules have changed forever and the “different rules ” mean that you – Mr. and Mrs. Brand are no longer driving the bus, your customers and prospects are and if you want them to be loyal – even in the face of rising prices, you better engage and stay engaged.
Named one of the Top 100 Influencers In Social Media (#41) by Social Technology Review, Steve Olenski is a freelance writer/blogger currently looking for full-time work. He has worked on some of the biggest brands in the world and has over 20 years experience in advertising and marketing. He lives in Philly and can be reached via email,Twitter, LinkedIn or his website.