Opinion

Calling bullshit on customer loyalty

dan monheitIn this opinion piece Dan Monheit argues people don’t buy a brand out of a sense of loyalty, but out of habit.

The current divorce rate in Australia is the lowest its been since 1976 when ‘no fault’ splits were introduced, and still stands at a staggering 40 per cent.

If almost half of the adult population cannot commit to a life partner, next to whom they’ve publicly declared ‘til death do us part’, how much weight can we really assign to studies that track customer loyalty to brands of cars, electricity, canned beans and deodorant?

Is it really possible that as brand owners and custodians, we’ve all massively overestimated the roles we play in our consumers lives? Let’s think about it this way; If our brand ceased to exist tomorrow, if we closed all of our stores or were removed from every supermarket shelf we’re on, would it ruin anybody’s day? Would any of our ‘loyal’ customers cry, or grieve, or walk out of the store they usually buy us from in a fit of blind rage? Or would they pick up the closest alternative, throw it in their basket and get on with their busy busy day?

The Ehrenberg Bass Institute have conducted a huge body of research in which they apply standard scientific testing methodologies to long held marketing assumptions (like loyalty). Turns out that real data on real shoppers buying real brands shows that we’re not even close to what we’d classically define as ‘loyal’. At best we’re promiscuous with a small set of brands (a repertoire), while at worst, we’re loyal to nothing but ourselves, picking up the cheapest or most convenient option regardless of brand.

It’s worth noting here that I’m not talking about our aspirational selves. Our selves that answer surveys and tell people we’d definitely buy Australian made, we’d have no issue paying a small premium if it meant saving the planet and we’d always choose organic if given the option. No, I’m talking about our actual selves, the ones who actually do the shopping and don’t exhibit any of these traits in the real world (as anyone who’s worked on an Australian, sustainable or organic product will attest).

So if we stop pretending that loyalty is a real thing that exists and can be managed, we’re left with no choice but to focus our efforts on the two things that actually do drive sales; presence on shelf (or street or search results) and presence of mind.

For us agency folk, there’s not a whole lot we can do about store locations, distribution or ranging decisions (presence on shelf). Presence of mind, however, is where we can make it count. It’s where being active in social media, running strategic, structured eDM programs, producing content that people are actually interested in, developing useful tools and applications, and running frequent, targeted, relevant advertising actually makes a difference.

People don’t need to pledge their undying allegiance to us to make it work. They just need to remember that we exist and that there’s a reason they bought us in the first place.

  • Dan Monheit is director of strategy at HardHat Digital
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