Is Brand Loyalty Really Dead? Or is Customer Loyalty?

Brand Loyalty is Dead

Whenever I talk about brand loyalty, I often share my own story when purchasing my cars. For over a decade, I was loyal to Ford. I loved the style, the quality, the durability, and the resale value of every car and truck I purchased from Ford. But that all changed about a decade ago when my car got a recall.

Whenever the temperatures dropped below freezing and the humidity was high, my car doors would actually freeze open. In other words, once you opened the door you couldn’t close it. After several seasons dangerously holding my driver’s side door closed, the dealership I purchased the car from refused to work on it for free again. I looked incredulously at the representative and informed him it was never actually fixed over the years. The manager denied my request and stated that they had performed the recall per Ford’s requirements and had to begin charging me each time I brought the car in.

Before that moment, I was loyal to the brand. However, that changed instantaneously when I realized that the brand was not loyal to me.

I was so upset that drove my Ford across the street and traded the car in for a brand new Cadillac. A couple months later, I talked my son out of purchasing a Ford and he bought a Honda. So, for less than $100 in work, Ford lost 2 brand new car sales by not assuring that I was taken care of as a customer.

Everyone always questions whether or not brand loyalty is dead. I believe we need to ask the opposite, is customer loyalty dead?

Only 23% of customers are loyal to any brand nowadays Why? Well, thankfully with the Internet at our fingertips, we have choices. Sometimes hundreds of choices. There’s no need in being loyal to a problematic brand, consumers can spend 30 seconds and find a new brand. And perhaps a brand that is more thankful for the consumer’s business.

Why do Consumers Break Up with a Brand?

  • 57% of consumers break up with a brand when their negative reviews remain unaddressed while similar products continue to be offered
  • 53% of consumers break up with a brand when it has had data leaks and data breaches
  • 42% of consumers break up with a brand when there’s no live/real-time customer service support
  • 38% of consumers break up with a brand when there’s no timely sales and promotions or offers

In a world of discounts and disposable goods, I believe businesses have lost sight of the value of a loyal customer. Year after year, I help businesses drive more leads and acquisition to their products and services. When they ask me what they could be doing better, I almost always begin asking them about their retention and loyalty programs. It’s insane to me that companies will spend hundreds or thousands of dollars to get a customer, but will deny them a customer experience that might cost a fraction of that.

Even as an agency, I’ve been working on my retention strategy. When I had some employee turnover this year, I missed some expectations with clients. Before I lost the clients, I met with them, discounted their contracts, and provided options on how we could get the work accomplished. I know how difficult it is to gain the trust of a client and when it’s at risk, I know I need to step up and try to make it right. It doesn’t work every time, but it’s much better than getting fired and turning over clients left and right.

We just shared an infographic from Bolstra on the ROI of Customer Loyalty. Customer success platforms like theirs are used to educate internal staff, identify issues that drive consumers to abandonment, and help you measure the impact of customer success on your brand’s profitability. Mature organizations are seeing that their overall profitability is severely impacted when their customer retention drops. And filling the bucket is only going to work until you run out of money – which we see with many startups.

Here’s the complete infographic from Rave Reviews, Brand Loyalty is Dead:

Brand Loyalty is Dead

What do you think?

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