Brand Switching

"62% of consumers who switched brand in the past 12 months did so because brands successfully attracted them, rather than bad customer experience pushing them away.

61% of consumers switched brand at least once in the last year, with automotive (70%) and supermarkets (68%) showing the highest percentage of customers willing to switch brands due to the lure of new opportunities.

Only banking found previous poor customer experience to be an equally decisive factor for the switch, where it was a 50-50 split.

Consumers see a brand being ‘genuine’ as more important in encouraging them to try a startup versus an existing brand they haven’t tried before (31% vs 17%). ‘Innovativeness’ (25% vs 20%) is also important, as well as ‘reflecting a consumer’s values’ (17% vs 13%)."

Source: MarketingWeek Monday, September 30, 2019 email 

Data source: Data & Marketing Association (DMA)

So authenticity, innovation and shared values are brand attributes that can lead to new brand trial and brand switching behavior. And, per previous research, high customer satisfaction does not guarantee customer loyalty. In fact, in categories in which customer satisfaction is high across most or all brands, loyalty is diminished.

For other thoughts on brand loyalty, authenticity, innovation and shared values consider these blog posts:

Loyalty: 

• Brand Loyalty vs. Brand Entrapment

Authenticity:

• Brands and Authenticity
• Brands and Authenticity
• Authentic Brands

Innovation:

• Brands, Change & Innovation
• Innovation and Brand Growth
• Creating "Category of One" Brands
• Creating New Categories Versus Battling it Out for Market Share

Shared Values:

• Brand Attributes, Benefits & Values
• Sharing Your Brand's Values Through Storytelling
• Improving the World Through Brands
• The Tesla Brand

Other reasons why customers may switch brands:

• Customer service is poor or lacking
• The brand does not deliver at least an adequate value for the price
• You do not have an adequate understanding of the customer and his or her needs
• Your brand is resting on its laurels, it is no longer exciting, it is not keeping up with the competition
• Your brand is not readily available or accessible compared to other brands
• Another brand offers a free trial and delivers a better value proposition
• A superior disruptive brand enters the market
• Your brand has not established sufficient emotional connection with its customers

We recommend that clients constantly measure their customers' attitudinal loyalty and emotional connection to the brand. Our BrandInsistence brand equity measurement system measures attitudinal loyalty and increasing degrees of emotional connection. Even small statistically significant changes can be bellwethers for potential problems. But know that no amount of measured satisfaction or loyalty can guarantee that brand switching won't occur.  

Brands and Rituals

For most people, the mention of a ritual conjures up images of religious or even occult ceremonies. It might include robes, chanting, incense and even perhaps sacrifices upon an alter. But a more universal definition of ritual is something done in accordance with social custom or normal protocol. 

So all of the following might fall under the label of ritual:

• Baptizing an infant
• Buying a diamond engagement ring to propose marriage
• Buying and decorating a Christmas tree prior to Christmas
• Sending a birthday card to someone on his birthday
• Carving a jack-o'-lantern for Halloween
• Having an Easter egg hunt on Easter
• Putting a child's tooth under the pillow for the tooth fairy
• Serving turkey and cranberry relish for Thanksgiving 
• Wearing a cap and gown and receiving a diploma upon graduating from high school or college
• Sunday brunch with friends
• Having a cup of coffee while reading the newspaper in the morning
• Brushing your teeth after a meal or before you go to bed
• Establishing a special date night each week
• Saying grace before a meal
• Summering in the same place year after year
• Rubbing a good luck charm before a game
• Having a standing lunch with a group of friends each month
• Having a glass of wine with dinner
• Having a nightcap before going to bed
• Shopping at the Public Market every Saturday morning
• Bowling every Wednesday night
• Playing bridge every Friday night
• Tailgating before a football game
• Grilling in the summer

My question for you is, "In what ways could you establish your brand as an integral part of a ritual to achieve brand loyalty?" Put another way, "How could you make using your brand a habit by establishing it as an important part of an ongoing ritual?" For instance, could you associate your brand with picnics, Super Bowl parties, morning rituals, bedtime rituals, Sunday rituals, graduation rituals, weddings, birthday parties, Sunday drives, annual vacations, after work happy hours or some other repeated custom?

Brand Accessibility

Accessibility is one of the five drivers of customer brand insistence in our proprietary BrandInsistence brand equity measurement system.  How does accessibility contribute to customer brand insistence? First, accessible brands insure that brand preference is converted into brand purchase. Why wouldn’t I purchase my preferred brand if it were completely accessible to me? If it were inaccessible, I might purchase a substitute product or brand or perhaps nothing at all. But I am getting ahead of myself. First let’s define accessibility. Accessible brands are brands that are easy to find, purchase and use.

What makes something accessible? Distribution. When a brand has broader distribution, it not only increases its accessibility, it also increases its awareness, one of the other five drivers of customer brand insistence. So increased distribution can increase customer brand insistence in two ways.

If a brand is ubiquitous, there is no excuse not to purchase it if it is your favorite brand. McDonalds, KFC and HSBC strive to be ubiquitous worldwide.  One of the key pillars of Coca-Cola’s success is distribution. It talks about pervasive penetration and being within an arm’s reach of desire.  And, at least in my town, Dunkin' Donuts seems to be opening locations every few blocks, competing with Starbucks for ubiquity.  Hallmark’s closing stores around the country certainly demonstrates that it is in trouble.

The Internet is changing the importance of physical distribution a bit because it enables people to research and purchase products 24/7 from the comfort of their homes. This works better in some categories than others. For example, physical distribution is still important for many articles of clothing because unless you can try the clothes on and see how they fit, look and feel on you, you don’t really know if you want them. Online retailers have innovated many approaches to overcome this limitation, but it is still a limitation.

But, what other than distribution can increase accessibility? If you think about the two most important scarce resources in people’s lives, they tend to be time and money. So anything that takes less time or costs less money increases accessibility. A somewhat counterintuitive corollary of this is that if you can make the experience more interesting, educational, entertaining, exciting, nurturing or otherwise positive, often people won’t mind spending more time. The same thing goes for money. If the higher price is a signal of social status or good taste or some other positive self-expressive quality, a person may not be as put off by the higher prices.

Time and money also relate to the value brand insistence driver. Value has a numerator and a denominator. In the numerator are all of a brand’s benefits – functional, emotional, experiential and self-expressive together with the values it shares with its customers. In the denominator is how much time, money and perceived effort it takes to purchase and use the brand.

High prices can make brands inaccessible to many people. For instance, not everyone can purchase a Tesla automobile. And even fewer people are able to purchase a Maserati or a Bugatti.

I often use the example of choosing a college or university to illustrate the concept of brand accessibility. If a high school student has a strong preference for a specific college, but that college does not accept him, what is that brand’s accessibility to him? How about if the college puts him on the waiting list? Or, if the college defers his admission for a year? What if he is accepted to the college but, after financial aid, that college will cost him ten thousand dollars more a year than the other colleges to which he got accepted?  So price (or cost to the customer) affects brand value and can affect brand accessibility too.

Limited store hours, nearby road construction, overcrowded parking lots, exceedingly long lines or only accepting cash as a form of payment can also reduce accessibility.

Accessibility helps brands grow through increased sales to existing customers and acquisition of new customers. Research has shown that larger brands have many advantages, even beyond the economies of scale and network effects. They have greater awareness, market penetration, popularity, and perhaps surprisingly, customer loyalty.

Even brands that have exclusivity as part of their mystique must be accessible in some way to their target markets.  For these high-end products and brands, price may be the best accessibility limiter. Price will be an issue for most people but not for the target customers. However, there still needs to be some sort of easy distribution method. The Internet is one option. Rodeo Drive (CA), The Mall at Short Hills (NJ) and other upscale shopping districts and centers is another. But how about selling the products at polo matches, equestrian events, yacht races and other targeted events.

Hopefully, this has shown that accessibility is an important driver of customer brand insistence. The other two drivers I mentioned in this article are awareness and value. The two brand insistence drivers that I did not mention (until now) are relevant differentiation and emotional connection. But, I will talk more about those in other blog posts.

Did You Know?

Generating brand trial is frequently the focus of smaller brands while large brands tend to focus on maintaining (and building) brand loyalty.
(Source: Allan L. Baldinger and Joel Robinson, “Brand Loyalty: The Link Between Attitude and Behavior,” The NPD Group.)

For a new brand, it is important to track the number of stores deciding to sell the product, while for a mature brand, it is more important to look at the number of stores delisting the product.”
(Source: Lars Finskud, “Bringing Discipline to Brand Value Management,” Financial Times Retail & Consumer Publishing, Brand Valuations, 1998.)

“For a fast-growing brand, the number of new loyal customers is important, but for an established brand it is the number of lost loyal customers that is the telling indicator.”
(Source: Finskud, “Bringing Discipline to Brand Value Management.”)

The typical No. 1 brand is worth 10 percent more than the No. 2 brand to consumers (range: zero percent to 35 percent).

Home Depot and Ralph Lauren use the same paint formula, but the Home Depot house brand charges $9.94 while Ralph Lauren charges $26.95. (The only differences between the two are packaging, price charged, and the brand name.)

GE receives a 26 percent to 40 percent price premium for its lightbulbs, depending on the SKU.
(Source: Jim Harmon, “General Electric: Creating a Global Brand Identity,” presentation at the Institute for International Research’s Brand Masters Conference, December 1997, Atlanta, GA.)

In its October 2012 issue, Consumer Reports indicates that the store brands they tested cost, on average, 25 percent less than equivelent national brands.
(Source: Store Brand vs. Name Brand Taste-Off, http://www.consumerreports.org/cro/magazine/2012/10/store-brand-vs-name-brand-taste-off/index.htm, July 7, 2014.)

Excerpted from Brand Aid, second edition, available here.

Brand Loyalty vs. Brand Entrapment

When I headed brand management and marketing for Hallmark, we invited Larry Light (among others) to talk with us about brand management. One of the concepts he imparted was the difference between brand loyalty and brand entrapment. 

Just because someone behaves loyally doesn't necessarily mean that he or she is attitudinally loyal to the brand. Consider that I have a large number of points with a particular airline of which I am not really fond. I have almost enough points for a free round-trip flight to anywhere in the US. I have accumulated these points over several years. One of the reasons I have so many points with this airline is not because I like it so much but because it best serves the routes I most often travel from my home airport. 

What will happen when I get to the number of points that provides me with a free round-trip flight? What will happen if I have almost as many points on another airline? Will I then become more behaviorally loyal to them instead until I earn enough points with them to get a free round-trip flight? What happens if a new airline with better service and a better value proposition enters the market? 

Real loyalty is based on an emotional connection and a superior value proposition, not the presence of a frequency program that offers discounts and other rewards. 

While a frequency program can create some level of behavioral loyalty, that loyalty is fragile if it is not supported by attitudinal loyalty. Certainly, frequency programs can create familiarity, habit and inertia. But they can't necessarily create attitudinal loyalty. 

Consider to whom you are loyal. What makes you loyal to them?

The two proven measures of attitudinal loyalty are:

• Would you recommend this brand to a friend/colleague?
• Knowing what you know about the brand now, if you had it to do all over again, would you still purchase this brand?

When you are seeking to build customer loyalty to your brand, you need to focus on both behavioral and attitudinal loyalty.