Word-of-Mouth and Referral Marketing Blog

Brand Loyalty is Overrated – Why Brands Succeed And Fail Despite It

We love talking about branding, and engineering continued interest in our brands. 

In this article, Tom Albrighton points out that all marketers are consumers, too, just like consumers today all exercise some form of self-branding.

And if we draw our truths about “brand loyalty” from our experiences as consumers, we’d realize that we make our purchases passively, most frequently out of inertia or convenience.

This shouldn’t surprise us, in an age where we’re spoilt for choice of great products at affordable prices, and brands are just too many to remember

Brand engagement is icing on the cake.

This means that branding is way down on the priority list for most of us (as consumers). We’re willing to try a product that works from a brand we’ve never heard of. But we’re just as willing to leave a brand we have strong feelings for, once it stops delivering on its promise (read: Apple and Facebook). 

Hate is a strong word, but the idea is that obsessing over brand loyalty is a little self-absorbed and delusional.

We’ve written about this before – that “brand love” only exists insofar as consumers are satisfied with the product and its price.

Brand love, then, is a reward for a job well done and a promise kept

Here’s one more example to illustrate this – brands that support (or fail to support) popular social causes. Chick-Fil-A invited scrutiny and a lot of criticism for its “pro-family” policy. But in the long run, its conservative policy made hardly a dent in its bottomline. People still went there if they liked a quick, half-decent chicken sandwich at an affordable price.

Because, politics aside, Chick-Fil-A makes and keeps a promise that its customers find useful. 

The reality is that brands are dispensable, and brand loyalty is founded on everything but loyalty.

Just last week I talked about Amazon’s dominance in the ecommerce sphere. I thought it’s also worth pointing out that according to the brand loyalty index Brand Keys, Amazon has outranked Apple in top place. At the same time, there’s a lot of buzz surrounding Alibaba’s IPO, and just how big a deal it is. 

Yes, Amazon and Alibaba are a big deal. And they illustrate very well the point that cosmetic branding is secondary.

On one hand, Amazon and Alibaba are online marketplaces of aggregated offers from thousands of merchants. In this manner, it’s not that the ecommerce giants are killing brand loyalty. They’re demonstrating where consumers’ priorities are – that given a good product, relatively low prices, and excellent services (like same-day delivery), consumers are quick to forget brands.

On the other, the two are subject to the hard truth they demonstrate. Amazon’s business model itself is vulnerable to obsolescence and disruption, as Alibaba proves to be a robust competitor. For one, while CEO Bezos is proud of Amazon’s ‘low margins’ model, Alibaba works on a ‘no margins’ model.

And while the Kindle tops the Brand Keys Brand Loyalty Index in the ebook reader category, it will easily be displaced by the next better player.

Your brand is as dispensable as a Plastic.
Your brand is as dispensable as a Plastic.

Consumers stick to your brand for the unique value of your promise.

Andy Dunn, CEO of Bonobos, shares a few tips for small businesses, on how to differentiate your brand. His “proprietary” strategy is all about offering a product and experience that are literally exceptional and exclusionary. 

For example, there is an experience that is unique to Birchbox because it’s a beauty discovery platform that offers a narrow and deep selection of other brands. And online clothing stores like Dolls Kill (probably my favorite) differentiates itself with its selection. I go there because I like alternative street wear, and Dolls Kill pools clothing from a wide variety of brands to assemble this selection.

Bottomline: We should be building better cakes, if branding is just the icing. Keep improving the product and experience you deliver to consumers – the loyalty will follow.

PS: There’s some confusion about what we refer to exactly, when we speak of “branding”. Seth Godin’s perspective frames a brand as a promise kept, and that brand loyalty is the delight consumers experience at being repeatedly given more value that they expect. Taking Godin’s view, I’d say that “branding” is very important, just misunderstood.

In this post, though, I’ve taken the more orthodox and common idea of branding – that is, branding as embellishment. According to this frame, branding would include a business’ logo, jingle, publicity stunts, sponsorships, social media campaigns, etc. That sort of branding is definitely overrated. 

Melissa Tsang

Melissa Tsang is a writer and speaker on the social impact of ecommerce and technology. She's also a bit of an impulse shopper. (A bit.)

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