Shoppers Aren't As Loyal To Brands Anymore
We're all sluts, so says the research.
Consumers, even the most blindly brand-loyal of us, are ditching their our favorite habits in favor of strange, seductive brands you met at a bar. And not just for one-night stands, either, a study by the Chief Marketing Officer Council and Pointer Media Network found.
Fewer than half of highly loyal customers stuck with their traditional consumer packaged goods favorites (a term that covers food, toiletries to laundry detergent — pretty much everything that comes in a package) in 2007 and 2008. And a
third of consumers ditched their previously favorite brands altogether in favor of new flings.
A PR Week story on the study reports:
The research found that less than half (48%) of highly loyal customers, those defined as "shoppers who made 70% of their category purchases with a single brand during a 12-month period," remained dedicated to the brand in 2008. In addition, 33% of these customers completely stopped buying the brand even while they continued purchasing items in the same product category.
Revenues for these brands could have increased between 4% and 25% had these customers remained loyal to these CPGs, according the press release announcing the study's results.
"Building long-term customer loyalty is arguably the most pressing issue marketers are facing," said Dave Murray, EVP of the CMO Council in a statement. "As this study demonstrates, granular-level, predictive modeling advancements offer new opportunities for relevant and personalized consumer interactions. CPG brand managers must take action to address the financial impact of loyalty erosion by identifying and engaging with today's at-risk loyal consumers."
You hear that, ad wizards? If only you'd sent flowers or remembered to say "I love you" once in a while things might have turned out differently. Put simply, if you liked it then you shoulda put a ring on it.
Once loyal consumers defecting from CPG brands [PR Week]
(Photo: Carl Fleischhauer)
Post a comment
Comments:
Yea, I think its more of a customer service issue than loyalty. And maybe more of a store loyalty than brand loyalty now more than ever. Most everyone shops amazon/newegg, but because of the store not the brands, just go to newegg and type in RAM and pick the highest rated, cheapest, customer top choice and you're almost guaranteed the best deal out there.
Put simply, if you liked it then you shoulda put a ring on it.
That's probably not as funny as I found it.
Seriously though, if you dilute the quality of your brand and your customers will go elsewhere. I'm looking at you Stouffers, Cambell, and Chef Boyardee. Gorton is about to run out of chances.
And no, you don't have to tell me I should be cooking more; I'm running out of alternatives anyway.
Why in the world should we be loyal to a single brand when the manufacturers raise prices, bring out the shrink ray, mess with the recipe, and find any way possible to treat the customers like garbage? I'll be loyal to a brand when the company starts showing some dang loyalty to customers!
I'm loyal to the cheapest brand, usually.
So... yes, a whore.
"Building long-term customer loyalty is arguably the most pressing issue marketers are facing"
This really says it all. Marketers don't build brand loyalty. Products and service build brand loyalty. To the extent that this is seen as a marketing and not a product and/or service failure this trend will only continue. Companies need to stop spending millions on advertising and instead stop scrimping where it really counts like overseas call centers. People are going to look back on the implosion of the american economy and the cause will be that more and more money was spent on marketing while less and less is spent on product. The end result of this is obvious and frightening.
I have never been loyal to a brand because no brand has ever stood out enough to garner it. Why would I pay extra for a name brand when the store brand or competitor probably was packaged by the same place. People are less about who you eat than what you eat now adays. You take the factor of taste, value, and availability and find a happy medium.
Two timing bastards, all of us. Except when it comes to healthcare, internet, cable, concert tickets, or helium.
Consider all the ways that consumer-product manufacturers have not only ignored their most-loyal customers, but outright burned them. I'm thinking mainly of The Great Grocery Shrink-Ray. Did they honestly think no one would notice, or — once they noticed, care — that they were paying more yet getting less than they'd gotten before?
Also, do they honestly think the best response to this is "marketing" or "engaging with" once-loyal customers (i.e. trying to convince people that they haven't actually been burned)? What kind of foolishness is that? How useful do they really think that will be?
I suspect that this is just a lot of excuse-making on the part of marketers. They're trying to say, "See? Those buyers out there are more fickle than everyone had thought. The loss of looyalty is all the consumers' fault! It can't have been the fault of manufacturers who screwed their own buyers!"
A better way to deal with it would be for manufacturers to "man up," admit they spurned their most-loyal buyers, put down the Shrink-Ray, increase package sizes and lower prices to what they were (say) 5 years ago, and stop this juvenile campaign of sniveling and whining.
On a slightly related note, I like how corps always bitch and whine about wanting free markets, and then bitch and whine about it when the free market kicks them in the ass.
If they weren't increasing prices, and decreasing product sizes, while raw food prices go down. If they want me to be loyal to them, they need to be loyal to their customers.
Marketing people are getting so desperate for attention that they've reduced advertising to background noise. Brand loyalty is becoming increasingly irrelevant for most consumer goods because we just aren't paying attention to advertisements like we used to. We just tune them out, block them, or skip over them.
Is there a list on Consumerist (or anywhere else) that shows products that HAVE NOT been hit by the shrink ray?
Ads? I remember them those were the things you used to see before DVRs and browsers that were smart enough to filter stuff, like flashblock. Ironicly, I think I see more ads on billboards than anywhere else now.
Maybe because loyalty in commercial transactions is a two-way street.
The only products I don't mess around with are my toilet paper and the moist food for the cats.
I agree with the others, if they hadn't tried ripping people off by raising the price by selling the smaller package for the same price maybe I'd be less likely to show them the door.
I've found that since I've reduced HFCS as much as I can, most of the major brands fall to the wayside. I'm unsure of it's because of less processed food, or if these brands rely on it more than the other do.
@Michael Knoll: You're thinking of Promotion, which is a part of Marketing, but only 1/4. Much of what a product is, where you can get it and how much (and how you buy it) is also marketing.
If you're a decent marketer, that is.
@MostlyHarmless: They want to have their cake and shove it up their ass too.
Or something like that.
I buy brand specific. I like what I like and price does not factor in much.
@Kevin: Yes, I think it's the brands that stopped being loyal to the shoppers.
Brand quality seems to have developed a natural life cycle: Start out strong to try to capture a loyal customer base, then take those customers for a ride as quality and service plummet in the name of the bottom line.
Look at the grocery shrink ray as an example of how companies are screwing the consumer. Less product, same (or higher) prices, and we're supposed to just eat it?
I'm loyal to whomever has the cheapest yet highest quality product. Simple as that. If Roundy's milk is $1.45/half gallon and Dean's is $1.79 for the same size, it's Roundy's. If it switches, then it's Dean.
For some things, I won't switch. E.g., Angel Soft t.p., Tropicana OJ, Bounty paper towels, All scent-free detergent, Cascade dishwasher detergent.
Other stuff: Fickle is my middle name. I found that Aldi's sliced lunch meat in little plastic containers is pretty much indistinguishable from the name brands, and more than $1 less per tub. Same with sliced cheeses vs. supermarket store brands.
It's a free-for-all out there in this economy.
@camman68: I don't know of an official list; for some things, we're screwed in that it seems all manufacturers have shrunk a product. But for those markets where there are the full-size product, I stick with them. Last I checked, Ben & Jerry's is still going with a 16-ounce pint. However, being unemployed, I am not buying anyone's ice cream these days. But once I get back to the grind, I'll be going with them for my ice cream fixes.
I usually always buy the el cheapo brands because they're cheaper and often the exact same if not very similar thing. Except for A1 Steak Sauce. No knock off compares to the original. Yeah, it's that important.
@TheBursar: "Wouldn't amazon/newegg be considered a 'brand' here?"
No, they're e-tailers. They aren't manufacturing anything.
90% of the time, I go by price. When I was a smoker I would vacillate between Marlboros, Winstons and Camels depending on who sent me coupons that week/month. I'll buy a 24 pack of whichever Diet Cola brand is cheaper that week.
I will echo what's been said above: If a brand shows me loyalty, I'll make the exception that puts it into that 10% of the time I shop by brand.
@MostlyHarmless: Well that's because all those things you named tend to have only one lady of the night in those areas, so it's her, or some rosie palm equivalent.
I have a lot more store loyalty than brand loyalty. I'll keep shopping at Whole Foods and Trader Joe's because they have good customer service. Name brands don't mean much though. Check the ingredient list (for food), features (non-food), and price.
"Brands" are just importers. How many times has my mother said "that's an XYZ so it must be good" and I've told her it's just a logo put on whatever Made In China product the company imported? Most consumer goods don't have a brand any longer, and are interchangeable.
@BZMedia: Neither are most brands, as they tend to farm it out to the cheapest Chinese prison labour money can buy.
Ok.. I'm just cheap. Does that make me a slut?
-dave
@Kevin: I think brand loyalty is a myth.
Just because I buy Coke and not Pepsi, doesn't mean I have to be loyal to Coke forever. Maybe I don't even like Coke, now that I can buy Dr. Pepper or some other brand.
When manufacturers do everything they can to cheapen their brand & maximize profits (or reduce costs), why do I have to keep buying the same brand?
I think its a generation thing. My parents and grandparents are loyal to their brands and have been for years. But they are from the time when people worked for the same company for 30 years, then retired. There are more options for us today and we are wiser consumers that will not buy the same cereal just because we like the brand name. If the generic brand next to the brand is cheaper, I'll take it.
Every time I might have a chance to develop some brand loyalty, the product disappears from shelves or the formula changes.
For some things, I'm loyal, because either (a) I think it makes a real difference, or (b) I'm not sure it does, but the price difference is too small for me to be willing to risk it.
@I Love New Jersey: "Neither are most brands, as they tend to farm it out to the cheapest Chinese prison labour money can buy."
Nevertheless, they are still the manufacturer, whether they use chinese slave labor or rich white kids from the burbs as their work force. Amazon is a middle man.
Could it possibly be that the basic problem is this: companies try too hard to solve all problems with ONE solution?
The only single solution that could possibly have a chance at winning the most consumer hearts is, "making the best product possible for the least amount of money". However, instead of doing that, they spend oodles of money on ridiculous, insulting, puerile advertising, AND/OR ridiculous packaging AND/OR buying out shelf space from local stores to crowd out competition (which pisses me off more than anything) AND/OR other obfuscation tactics that do nothing about product quality and/or price.
Brands are never good. Brands cost money to market and that means lower quality since they can only raise their price so much.
@Rectilinear Propagation: Amen. I'm loyal to brands that maintain a quality level and don't screw with me. I'm loyal to Tide because it cleans my laundry good, comes in the type I want (no fragrance or other additives), and I fear change. But I don't fear change so much that if Tide started screwing with the recipe, putting scent in everything, or making my life difficult, I wouldn't change.
When Kotex (I think it was) started changing their packaging every couple months on feminine products, I switched to the competitor. I liked Kotex better, but not enough better to spend five minutes every shopping trip looking for the right box because they'd changed the packaging AGAIN. Make my life hard, I'm leaving.
I expect that many consumers are like me: Once you find something reliable that you like, you will keep buying the same thing until you're given reason to buy something else. SO QUIT GIVING ME REASONS, and I'll be "loyal" out of inertia.
Now, if you want my real loyalty, I need some above-and-beyondness going on here. Like Tylenol for the baby -- no store brands for the baby; I know I can trust Tylenol to recall the entire drug from the market if there's a problem that puts consumers at risk.
(And I'm pissed at Campbell's for discontinuing Fiesta Chili Beef.)
@Harry Pothead: THIS.
Although the "cheapening" part applies more to manufactured goods than groceries and such, if you used to put sugar in something, but now you're using high-fructose corn syrup because it's cheaper, you're still guilty. So why should I remain loyal to Coke when it stopped really being Coke in the 80s? And as long as we're offering 2-liter bottles of it for 1.29, let's see if Store Brand Cola, a 2-liter bottle of which sells for 89 cents, is any better or worse.
The only way I can see brand loyalty working out is when grocery stores start getting selective about whose bottles they'll accept for deposit (New York has a bottle bill, but stores aren't required to accept containers for brands they don't carry, like other stores' private brands). Then, it's the store that is being preferred, not the product. I mean, why should I just buy major brand-name soft drinks and avoid the most exotic brands of beer just because Store X might not carry that brand and won't accept the empty containers?
So do you hear me, Price Chopper? It's Hannaford for the win because I always end up shlepping half my bottles and cans back to the car when I try to unload them at Price Chopper. That and Hannaford doesn't use loyalty cards.
@Andrew Dorsett: I don't tend to buy store brand on most things but for the most part whatever brand is on sale. But my holdouts are Welch's grape jelly, smuckers strawberry preserve, skippy peanut butter, and tropicana OJ. And tropicana knows I only buy their OJ, so when they pulled that redesign BS I was so very happy when they said they'd change it back.
Granted I have since moved back home where I do not control what gets bought...
I used to be loyal to one brand, then the brands started ignoring me...so I began to "shop around".