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My Brand Is Here to Stay

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Posted August 7, 2001 By EnterpriseAppsToday.com Staff     Feedback

Despite everything awful in the Internet sector, 11 of the current top 25 brands for customer loyalty are in the Web or telecommunications arena. In this look at what makes customers loyal, Robert Passikoff sings the praises of those companies that are doing something right.

By Dr. Robert Passikoff,
President of Brand Keys

We've often said that brand marketing and popular culture have a lot in common. Both have -- or should have -- their roots in, and be designed to connect with, people's lives and people's values. Maybe that's why, recently reviewing the results of the Brand Keys 2001 Customer Loyalty Leaders Index, a portion of Ira Gershwin's great lyrics -- somewhat altered -- sprang to mind:

Oh my dear,
My brand is here to stay.
I need not fear value will go away.

In time the Market may crumble,
The Dow Jones may tumble,
That was so "yesterday;" but
My brand is here to stay.

OK, OK, so it doesn't flow like Ira's version. But it still underscores the fact that -- despite recent Wall Street spasms -- 11 of the "Top 25 brands with the most loyal customers" (based on assessments by 16,000 adult brand customers) are Internet or telecommunications brands.

We sing the praise of those loyalty leaders that are doing something right. And that right thing is simple, once you understand what it is -- measuring the direction and velocity of customer values; capturing the values of which customers have the highest expectations; and then leveraging the hell out of those values.

Advertising, promotions, direct response, point of purchase, and process re-engineering are all elements designed to stimulate customer loyalty. But they're all procedures, not ideas. And whatever combination of procedures you rely upon, you'd better be sure that they're based on values that relate to customer values for the category. And, you'd better be sure that your target audiences are willing to believe that your brand embodies those values.

The following category leaders all feature ideas, as well as procedures and distribution systems, that really resonate with the customer values of their categories. And most -- the new categories and brands that we add annually notwithstanding -- have moved significantly up the loyalty list. These are clearly companies who recognized the differences between the 20th century values of 1999 and the values and expectations of 2001. For example:

AVIS was ranked #12 in 1999 and is now ranked first. It is likely that such levels of customer loyalty were arrived at by recognizing -- and delivering -- customer service that still "tries harder."

Sprint was ranked #91 in 1999 and has risen to number four. The company has managed this by leveraging the expectations customer have for high technology, and doing so without the appearance of chintzy bargain-basement carping on low, lower, lowest cents-per-minute.

Mobil gasoline, always ranked well, was #17 in 1999 and has now moved up to the #12 spot. The company did it by capitalizing upon customer expectations regarding speed. They exceed customer expectations in getting you in and out quickly, and their Speed Pass is an added value to offset increased prices. (And anyway, customers tend to perceive all gas as just gas)

Discover card did it by meeting the expectations regarding added value (beyond air mile continuity programs) with cash back for cash spent. And New Balance does it by meeting the expectations of style and comfort ("Well made in the US of A!")

The biggest brand slippage is in utilities. Clearly they're not concentrating on loyalty drivers. They're fast becoming the telecoms of the 21st Century, relying mainly on "cost savings" to get new customers and keep old ones. Apparently the signs over their doors, huge so even dairy animals can read them, spell out what all customers really think of utilities: "C-O-M-M-O-D-I-T-Y."

Interestingly, when the "Hotel" category was added to the Loyalty List, three immediately rose to the Top 25. When "Retail Stores" came along, Sears and Wal-Mart showed up as well. These and other customer loyalty leaders understand the immutable economic axioms of developing and maintaining a loyal customer base:

  • It costs 7 to 10 times as much to get a new customer as keep an old one.
  • A loyalty increase of 5 percent can result in a profit increase of 95 percent.
  • A 2 percent loyalty increase can translate into a 10 percent across-the-board cost saving.

Once, delighting the customer was enough to differentiate the brand and increase chances of keeping that customer loyal. But that worked only until "delight" became "expectation." Unless you can always meet or exceed expectations, you won't keep your customers loyal.

That means it's essential to be able to measure the direction and velocity of customer expectations. But most companies don't, won't, or can't do that. And most of them learn of that failing only after the brand itself has failed. Want to know which brands fall into that category? Just take a look at some of the companies on the bottom of our Customer Loyalty Leaders list.

For a company to plan for performance -- and attendant profitability -- it must be able to create marketing plans, communication programs, products, and services that consistently exceed customer expectations. Doing that makes customers loyal -- and keeps them loyal.

And you want your brand to keep doing that for as long as possible. As it were, "forever and a day."

To view a complete list of top loyalty leaders, click here.

Reprinted from ChannelSeven.com.

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