Loyalty is a losing game
This week's bit of genius from marketoonist Tom Fishburne looks at the question of brand loyalty. Many gurus preach that companies can grow by through efforts to make their consumers more loyal. Kevin Roberts from Saatchi & Saatchi urges the creation of "Lovemarks" that have “loyalty beyond reason” (see my version of this here, called Hugbrands TM).
However, as Tom rightly says, "Very few consumers are exclusive to any one brand in a category. Most consumers shop a portfolio of regular brands depending on what meets their needs at the time." And this "brand promiscuity" has only been made worse by the proliferation of price promotions.
But the key to growth is not trying to increase loyalty. As covered in the new Grow the Core book, loyalty levels in a given category tend to be similar across brands, as shown in Byron Sharp's research. The key to being a bigger brand is to increase penetration, enlarging the group of people who use you at least once a year. In other words, make your brand more popular, more famous.
Here are some suggested actions for you to consider:
1. Experiment with brand activation: its hard to kick the coccaine habit of marketing, which is price promotion. But try to experiment with brand activation that offers a compelling consumer offer related to the brand story, not price reduction, as I posted on here. An example is Powerades Olympic water bottle offer.
2. Remove "barriers to penetration": it ain't sexy, but reducing out of stock levels and distribution issues is an important way to ensure your brand is available when people want to buy it.
3. Drive distinctiveness: brands need to distinctive today more than ever. Having a distinctive identity that stands out on shelf is key to encourage shoppers to "grab and go" with your brand, buying instinctively and not stopping to think and compare prices and promotions. For example, a distinctive jar shape and brand identity has played an important role in Hartley's becoming the UK's leading jam, with a market share of c. 25%, despite no advertising support.