The word “brand” is probably the most abused word in marketing today. You’ll hear it being bandied about in almost every marketing discussion, with everyone assuming that everyone else knows exactly what it means. And it’s taken as accepted wisdom that it is the job of marketing to create brand loyalty. Well, it’s not.
But before we get into why it isn’t, we need to define our terms. I define the term “brand” from the customer’s perspective, as:
A set of experiences with a company that are transformed and codified into an attitude towards the company’s products, services, etc.
Once we’ve defined the word “brand” thus, here’s what “brand loyalty” is all about:
- Brand loyalty is a strong attitude of preference for a company’s products, services, etc, that is formed based on distinctly positive past experiences with that company.
- This means that the customer is either using the product right now, or has used it in the past. You can’t be a loyal Coke drinker if you’ve never drunk Coke before, or if you have but drink Pepsi nowadays.
- This also means that when it comes time to replace that product, the decision of which company’s product to buy is already made in his / her mind. There will be no evaluation of competitive offerings for that product / service. The customer will straight away go with the brand she is loyal to.
- Brand loyalty can be cultivated only by offering a fantastic product, service or customer experience. Marketing / promotion cannot create brand loyalty.
What marketing can create, however, is “brand preference”. Here’s what that’s all about:
- Brand preference is a mild attitude of preference for a company’s product or service, that is formed based either on past experience with the company, or on information gathered from various external sources about the company’s product or service.
- It is not necessary for the customer to have used the company’s product / service in the past.
- This means that the company starts with an advantage in the consideration set for that product or service in the customer’s mind.
- However, there will usually be an evaluation of the company’s product or service against those offered by the competition. It is possible for the competition’s product or service to offer value or quality that is superior enough to this company’s, so as to overturn the initial preference for the brand.
- Marketing has a big role to play in creating brand preference. And in the case of products / services that do not or cannot create a deep enough relationship with the customer, even actual experience with the product can, at best, create brand preference, not brand loyalty.
The last point above is critical: the depth / breadth of a company’s relationship with a customer has a direct correlation with its ability to create brand loyalty. For example, it’s much easier for a car or consumer electronics company to create brand loyalty (provided they offer a superior product) than it is for a soap or a shampoo manufacturer. The depth of the relationship and the higher amount of money / time / effort involved in choosing the product, mean that a customer is much less likely to try a new car or cellphone brand than she is to try a new soap or shampoo.
Similarly, in the case of services, it’s much easier for a bank or a restaurant or an e-mail provider to create brand loyalty (again provided the quality of the service is good enough), than it is for a multi-brand retailer or an e-commerce company. The amount of time and depth of interaction with the customer make it much riskier for a customer to switch brands.
So before you start laying the blame at marketing’s door, think about the quality of product / service you’re offering, and what kind of relationship you have (or can have) with the customer.