Word-of-Mouth and Referral Marketing Blog

Brand Loyalty: Not Dead, Just Different

 Is brand loyalty (almost) dead?

Geoffrey James of Inc certainly thinks so. People are loyal to products now, not to brands.

Why? Because ubiquitous online reviews have made it incredibly easy for people to safely switch products. When the cost of switching is low, the value of brand loyalty diminishes with it.

The landscape brands operate in has changed dramatically, but the fundamental human psychology underlying trust and loyalty hasn’t. People still recognize quality when they see it. We still have the capacity to be excited by great products.

After all, if it weren’t true, why would Inc still be publishing other posts titled “The Real Test Of A Great Brand” and “How to Make Your Customers Fall in Love with Your Brand”?

Superficial attempts at branding definitely don’t work anymore.

“Spending a lot of money on paid marketing is a great way to scale a bad business.” – Andy Rachleff, Executive Chairman of Wealthfront, investor in Bonobos

Geoffrey and I are in complete agreement here. He points out that celebrity endorsements don’t work the way they used to, and that he wouldn’t buy a PC or an SUV based on his prior experiences. He’d simply look up the best available product in his price range, and buy that.

That makes perfect sense – in spaces where brands are relatively homogenous. There haven’t been any massive breakthroughs in PCs, SUVs, Cola or even smartphones for some time. So the statement “it’s all the same junk made in the same factories” is valid in these fields.

But this isn’t always the case. The best brands rise above the noise of others and deliver incontrovertible value.

  • Consider Tesla Motors, for instance, which has been consistently innovating and breaking ground with the purpose of accelerating the advent of electric vehicles. When Tesla unveiled the Model X, orders for the earlier Model S went up by 30%. As Tesla proudly boasts on their website, they’ve built the safest car in history.
  • Consider Bonobos, which has earned impressive reviews for its relentless focus on great fit and great customer service. They literally made better pants. They’re aiming to be the first digital era menswear brand to cross a US$1 billion valuation, and they look well poised to do it.

So it’s not always the same junk made in the same factories.

Building a brand is about creating great products, consistently.

“A great brand starts with a hero product.” – Andy Dunn, again. (He really knows his stuff.)

Geoffrey implies that branding and product are separate things. They’re not! Products are at the heart of every brand.

Similarly, it’s a little inaccurate to suggest that “investing in branding” must mean spending on relatively superficial peripherals like logos, copy, jingles, advertising, etc. Your logo doesn’t matter all that much. It’s just the icing on the cake.

To truly invest in branding is to invest in product development. To invest in building the culture of excellence that yields great products, in people and in processes. That’s the best possible ROI you can get on your brand.

Brand loyalty will be around as long as brands are deliberate about making great products.

Geoffrey and I seem to disagree about what a brand is, and what it means to invest in one, but we definitely have the same idea about how to run a business:

“Companies that want to be successful should spend more money on building and publicizing great products–” YES!

Building and publicizing great products is exactly how you build a brand.

And if you’re just starting out, there’s nothing better you could do for your brand than to take Andy Dunn’s advice:  If you want to build a brand, build one great product.” 

EDIT: Jim Gray made a very astute comment in response to this that I think is worth sharing. He said, ‘Also, think “brand trust” not “brand loyalty” – it’s absolutely a case of self-centered vs. customer-centered thinking.’

I totally agree. Loyalty itself feels like a bit of an archaic concept. While people might be loyal ‘in behavior’, it does feel a lot more natural to ask “What brands do you trust?” rather than “What brands are you loyal to?” This feels like it’s part of a much broader shift in social attitudes about commitment, not just re: Brands.

Recommended reading:

Visakan Veerasamy

Visa is ReferralCandy's Blog Editor. He also co-founded Statement.sg, a fashion ecommerce label selling witty t-shirts. He's been thrice named a Top Writer on Quora. He hopes to enjoy a glass of whiskey onboard a commercial space flight someday.

5 comments