Tuesday, November 18, 2014

Brand Loyalty, a dangerous and outmoded marketing principle

Like so many things in business today, the speed and acceleration of change is having an amazing widespread impact. Across the past thirty years of my business career, I have experienced the advent and explosion of technology across a wide number of fronts. It’s hard to imagine that in my first marketing role in 1985, there was one fax machine shared in our BUILDING, one PC that was shared by my DEPARTMENT, no use of cell phones, no concept of a tablet, and no idea of what a “world wide web” might mean to any of us, personally or professionally. Clearly the distant past!! While it seems clear that the dramatic impact of technology has changed many elements of how we get our work done, it is interesting for me to see how these changes have also affected a number of the foundational principles of business and marketing that I was taught in business school. One such example has to do with the concept of “Brand Loyalty,” and the overarching “Brand Adoption Model,” which I was taught as a student over thirty years ago and unfortunately remains in many b-school curriculums today.

This “Brand Adoption Model” was a foundational element in all b-school marketing classes, and typically was depicted as a ladder or across a horizontal spectrum, linear and clear in each distinct step of the process. It usually looked something like this:

Unaided Awareness -> Aided Awareness-> Trial-> Repeat-> Preference-> Loyalty

While I have critiques across the board and at the end of this essay will offer an alternative to the model as a whole, the really dangerous idea of this approach is the concept that “Brand Loyalty” is the destination of this model, the end point of the marketing efforts, and seemingly the unassailable hill of your marketing efforts. Well my experience over the past thirty years and most importantly over the past ten years teaches me that you are never “done” as a marketer, and that the consumer may be loyal today/this moment, but tomorrow is a different story.

The reality of the “promiscuous consumer,” is prevalent across so many categories. We all have more choices for every possible purchase decision, and more information at our fingertips giving us input, ratings, suggestions, discounts, and opinions/reviews for each and every commercial choice. Whether choosing a car, a hotel, a restaurant, a doctor or a seasonal beer for a party, there is a deluge of information and input vying for the consumer’s attention. There should be no surprise that consumers may seem a bit “promiscuous,” so many choices, so little time!!

It is specifically this reality that makes me deeply question the idea of “brand loyalty,” and makes me consider it dangerous and outmoded. No marketer should EVER think about consumers as being “loyal” to their brand. Every day we need to wake with the fear and concern that some other product or brand is out there working hard to capture the interest and imagination of our brand’s consumers, and will not sleep until they divert their attention and purchases to their brand or product. There are so many examples of big brands losing their franchises over the past few decades, just remind yourself of the current status of Blockbuster, Pontiac, Kodak, or Myspace; all at one time leaders in their fields/categories, now all gone (or almost gone) from the landscape of consumer choice. There was certainly no residual “brand loyalty” that insured their success. Quite the opposite, over time consumers explored new choices in those specific categories and found alternative brands/products that better met their needs/wants/desires.

Clearly I think the idea of “Brand Loyalty” is outmoded and dangerous, and correspondingly I think it is time to consider a new “Brand Adoption Model.” Instead of a linear model, I believe that it needs to be circular and dynamic, always working to refresh itself as consumers and marketplaces change and flow over time. And instead of “adoption,” I want to advocate the idea of “Brand Advocacy” as the central defining premise.

Brand Advocacy: whether you want to think that this model begins or ends in this idea, it is vital and central to my thinking. A marketer and a business leader is working to have strong and growing advocates for their brands, and today sharing their pictures (Instagram) or ratings (Yelp) to their personal networks. The most potent way for anyone to consider a new brand / product choice is to have their friends “tell them” about it … otherwise advocate for it!

Brand Relevancy: Once advocated, is the brand relevant in my life and in my set of choices. Recently I had a friend share how much they love a specific SCUBA resort destination in the Caribbean, inclusive of pictures and specific hotel room reccos. While fascinating, I am not interested in SCUBA and thus the advocacy was irrelevant. In the sea of input, ratings and reviews, all consumers process through this “filtering” step.

Brand Action: think of this as “why act now.” Once advocated and relevant, something must trigger some sort of action. This might be an offer for a sample, a discount or a direction of where to find a certain option. Recently I was hosting a friend that not only loves craft beers but looks forward to all of the “Oktoberfest Beers” that hit the market every fall. Well this year I checked reviews on line and while reading a review for Sam Adams Oktoberfest, a pop up ad appeared, highlighting it on special at my local Publix. As a loyal Publix shopper, I was intrigued, and that little spark moved my decision making along.

Brand Purchase: Ultimately all good things need to result into a commercial action. I am a firm believer of A.G. Lafley’s first and second moments of truth for a brand (I will share that idea on a future essay) and that the fist moment of truth for any brand occurs at the point of demand. For many brands/categories that moment is at the retail shelf. Is the brand ready to win at the point of demand, to turn “advocacy, relevance, & action” into a purchase moment? Following up on my Oktoberfest beer example, on my next visit to my local Publix store, I encountered Sam Adams Oktoberfest beer in three environments in that specific store. In the deli, a small display was setup next to an area featuring brats and sauerkraut. In the beer aisle, it was clearly available and nicely merchandised and in stock and cold. Finally, towards the back of the store, there was a nice size display of a family of Sam Adams beers, clearly featuring the Oktoberfest seasonal beer. Three points of brand interaction and a number of clear calls to action at the point of demand, clearly a winning formula for the first moment of truth.

Brand Preference: Well we have come this far, how does the product actually perform to your expectations. Does that brand purchase exceed your expectations, or does it fall below your expectations? How many times have you tried a restaurant with a yelp score of 4+ stars and a sample size of n>= 200, only to be disappointed by the food or the experience? Brands need to win at the point of demand (as highlighted above) AND win at the point of consumption. What was fascinating about my Oktoberfest beer loving friend, he had dismissed Sam Adams as being to mainstream and had never bought it for himself. Once he tried one at my house, he loved it and became a quick advocate!

REPEAT and REPEAT Quickly!!

This model ends as it begins with “Brand Advocacy.” Is your brand experience good enough to make you a fan, a “raving fan,” good enough to make you a "brand advocate??" That is the destination, and hope of every marketer and business leader; that every day, you are creating more “brand advocates” than you did yesterday, more than your known competition, and you always watching the consumers and the marketplace to make your brands/products more relevant every day! This never ending cycle operates at a very high tempo, with technology accelerating the cycle over time. One needs a healthy sense of paranoia as a brand leader today; always scanning the marketplace, working to build your brand's “advocates” one day at a time, every hour and every day!