The 15th annual Brand Keys Customer Loyalty Engagement Index (CLEI). asserts that loyalty is alive and well. It’s a significant survey of 46,000 consumers between 18 and 65. But if we only paid attention to CLEI in assessing brand loyalty, we’d miss the bigger picture.

It’s true that consumers have greater choice than ever in the channels they frequent, services they subscribe to, and, despite SKU-reduction initiatives, in the products they buy. Robert Passikoff, President of Brand Keys, notes winning brands share common factors of (1) innovation and (2) experience:

1. Innovation. Change in e-commerce has set standards for invention across product and service categories.

2. Experience. Attributes that delight, actions that mend service errors, or things just intuitively “work” stand out in the marketplace.

Five winners that embody these traits are Hyundai in autos, Apple in computers, Ace in home improvement, Tom’s of Maine in toothpaste, and Netflix in movie rental. Interestingly, innovation has impacted categories followed by CLEI as well. Hello e-readers, goodbye online bookstores. Hello HDTVs, goodbye electronics stores.

However, while CLEI paints a positive picture of loyalty trends using psychological assessments, when we dig deeper we see the story is less optimistic when assessing behavior. The CMO Council has reported half of all high loyals left their “favorite” consumer products a year later. dunnhumby found 70% of product champions left or bought less of their favorite brand during the same period.

Turning loyalty into a business driver requires marketing strategies and targeted programs that retain most loyal consumers so that they remain most valuable consumers.

Categories: Branding, Loyalty | Tags: , , , | Leave a comment

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