In just three years there’s been a 20% decrease among consumers in brand loyalty, according to a study conducted by comScore. Those who make their living in the world of consumer marketing or business to consumer marketing or B2C marketing – whatever the hot phrase is these days, would be wise to keep reading…

The study, titled The Effects of the Recession on Brand Loyalty and “Buy Down” Behavior: 2011 Update, surveyed 1,000 female shoppers, who we all know make the majority of household buying decisions, hence my recent post Marketers And Advertisers: Women Are Driving The Purchasing Bus, Get Used To It. So it was quite wise for the folks at comScore to use women as their audience to conduct this study/survey. And for the record, the market segments which were examined in this study varied: Toothpaste, Mouth Rinse, Shampoo, Cough/Cold/Allergy Medicine, Jeans, Soup, Pasta Sauce, Fruit Juice, Laundry Detergent, Facial Tissue, Paper Towels and Small Appliances.

Just so know what categories/segments we’re talking about here but please don’t make the mistake of thinking that just because your particular segment isn’t represented, you can stop reading.

Now, comScore asked all sorts of fascinating questions which revealed some very interesting and intriguing results but of course I want to lead off with what I consider to be the most telling of the findings, the aforementioned 20% decrease in brand loyalty:

Just three years ago over half of the respondents indicated they buy the brand they want, presumably regardless of price. And now? Well the decline is obvious and ties in of course with the recession. 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.”

And where are they “buying down” to? To what used to referred to as “generic” or “store brand” and are now called “private label.”

From the findings: “According to SymphonyIRI, private label dollar share increased from 16.4 percent in 2007 to 18.5 percent in 2011. This increase is evidence of the ―buy down‖ phenomenon, which is to say that consumers are buying less expensive products in order to save money.”

It’s All About The Mighty Dollar…

In what should shock absolutely no one, the number of people indicating they switch brand allegiance if another brand is on sale and the number of people indicating they buy less expensive brands to save money have both gone up in the same allotted timeframe of 2008 to the present.

There’s also a section in the survey findings that deals with how people are price shopping and comparing prices and shockingly (not) the results showed that the older someone is the more likely they are to use things such as a newspaper whereas the younger someone is the more likely they are to use a computer or their mobile phone or smartphone. What a waste of time that question was but I know, their just doing their job.

Quantity Vs. Quality…

But one of the most intriguing parts of the survey and its results were the responses to the question regarding what consumers were willing to give up in the face of rising manufacturing costs. Respondents were asked which action would you most want your preferred brand within each category to take, if it had to take a cost controlling action?

  • Increase price by 10%
  • Reduce the quantity by 10%
  • Reduce the quality of ingredients by 10%

Here’s what they said…

Now overall, this chart speaks to the fact that people are concerned about one thing: Price. Most people would sacrifice a little in quantity to (presumably) pay the same or even less. That makes perfect sense. Although downsizing does has its pitfalls as 66% of respondents indicated they would at the very least consider changing to another brand if one brand downsized their product:

What doesn’t make sense is how anyone could choose the option “Reduce the quality of the ingredients by 10%.” I know the percentages for this option are low but help me out here. Why would anyone want to cheapen the ingredients just to save a few pennies? And do you really think the “revised” ingredients would be any good for you? I know, how do we know what the quality was in the first place? Good point… but that just speaks even more to the fact even one person would sacrifice quality of ingredients for ANY reason.

The other thing from the above chart that gets my head to aching is trying to understand the rationale behind those who the size (quantity) of their jeans reduced by 10%. Wouldn’t that just be wearing a smaller size? Or what am I missing?

One Last Very Important Point…

To their credit, comScore offers some, what I consider to be, very valuable advice to those brands currently part of that 20% drop in loyalty.

First and absolutely foremost is to keep spending on advertising. The worst thing an advertiser or marketer can do during a downturn is spend less. I realize that may sound somewhat “oxymoron-ish” but it’s the truth and to prove it, comScore cites some telling examples:

  • 1.5 point increase in market share among businesses increasing ad spending during recessionary periods (Cahners and SPI, 2002)
  • 2.5 times increase in market share vs. average of all businesses in post-recession period for those who aggressively increased media expenditures during last recession (CARR Report, August 13, 2001)
  • 256 percent relative sales growth for businesses which maintained or increased media spend during the 1981/1982 recession over those who did not (McGraw-Hill research analysis of 600 B2B companies)

comScore provides their reasoning as to why brands and companies need to keep spending on advertising during a recession:

1) Minimize short-term erosion of market share to less expensive brands

2) Position the brand for a “bounce-back” when the economy eventually rebounds

I would offer up a third reason…

3) Keeps your brand in front and on the mind of your customers; always a good thing, don’t you think?

Sources: comScore, Google Images, The Star Group, When It Comes To Consumer Marketing, Is Brand Loyalty A Thing Of The Past?