Brand loyalty has always been an enigmatic thing. A holy grail of marketing perhaps; certainly an often elusive goal. Arguably as online options flourish, it becomes a lot easier for shoppers to ‘shop around’. Instead of having to trek from store to store, different and diverse choices are literally in the shoppers’ laps. As Nielsen produces a global report on the state of brand loyalty (and for many marketers it makes pretty grim reading!), it’s important to really understand the impact of online shopping on brand loyalty, and what marketers need to do about it.
Loyalty is about value and ease
When marketers talk about loyalty, they talk about many things: about delivering a superior usage experience, or about creating emotional bonds with consumers. But as I’ve argued here, when it comes to shopping, that ‘consumer love’ counts for less. When it comes to shopping, and shopping around, one of the key measures is ‘how easy it is to switch?’. This is supported somewhat by the data in the Nielsen report. Highest loyalty levels are recorded for services such as ISPs, or mobile phone operators. Whilst these are hardly difficult to switch these days, it is certainly a more complex process than buying a different breakfast cereal. To put it simply, decisions are made on a simple matrix of value and ease – with shopper prioritizing decisions that add value, and are easy. And, in my experience, ease often trumps value.
Online shopping makes decisions harder
Herein lies the conundrum of the online world. In theory, online shopping makes switching easier, because different choices are available without traveling around. Consider pretty much any category, and there is simply more choice online than even the most expansive offline retail store could offer. But too much choice makes decisions difficult. Anyone who has tried to plan a vacation in the age of Trip Advisor knows what I’m talking about – there was a time when vacations were booked out of a brochure: choose the country, choose the hotel and away you go. Now every option is painstakingly reviewed extending the decision process significantly. Therefore, in the online world, making decisions is harder, or at least more time consuming. And therefore shoppers will prioritize important decisions only. Or put it another way, they will spend time on high value decisions, and less time on others.
It is important to bear in mind that value is perceived differently by different shoppers: a 5% price difference may be insignificant to some; but might be plenty for others. The same is true for the ease/difficulty equation. Popping to a couple of stores might be a breeze for some shoppers and a chore for others. The same could be said for reading through technical specifications on brand or store websites. In other words, the impact of online shopping on brand loyalty will differ by shoppers, categories and brands.
So if shopping decisions are made differently in this digital age, how should marketers adapt their approaches to defend and build brand loyalty?
Identify who is likely to switch
Depending on whether you are trying to win shoppers, or keep shoppers, the key first question is the same: which shoppers are most likely to switch? Which ones may leave my brand; which ones could be persuaded to buy? Understanding which shoppers are most valuable is nearly always the first step of any shopper marketing endeavor. Likelihood to switch can be defined by understanding the value an ease equation. Shoppers who stand to gain significantly by switching; or those that have easy access to alternatives, are most likely to switch.
Where are they most likely to switch?
In a multi-channel environment, different shoppers behave differently in different channels. A loyal shopper in a drugstore may be a disloyal browser in a hypermarket, or online. Understanding which channels your target shopper uses, and where they are most likely to switch is critical if we are to focus our marketing efforts.
Identify the enablers and barriers
For this specific group of shoppers, what will make them stay; or what will make them switch to my brand? Is the primary driver about ease/difficulty, or is it about added value? What can be done in this specific channel to add value, or to make switching harder? Can we focus on bulk purchase, to lock them in; or home page advertise to prevent shoppers from getting into a browsing mode? Can we affect the merchandising in a store to encourage brand loyalty?
Increasing brand loyalty is about understanding and affecting how decisions are made
If shopper marketing is about changing purchase behavior (which it is) then it is about influencing and affecting decisions. Digital is changing the way people shop, and changing it in ways which are not always intuitive. Never is assuming more dangerous than in attempting to decipher how decisions are made. Of course it might not always be possible or affordable to research all of these details. But if shopper marketers focus, not only on how to add value to shoppers, but also how to make switching out of the brand hard, and switching into the brand really easy, then they are on the right track. For those of you who do have a budget to conduct shopper research – check out this eBook to help you maximize the value you get from your next research project.
