Like all things, brand loyalty has suffered in this recession. Shoppers are less interested in the name on the label and more concerned with the price tag. A study released earlier this year found less than half of all American customers stayed loyal to their brands in 2008. According to a Reuters article, “19 percent reduced their loyalty and 33 percent completely defected to another brand in the same category in 2008.”
But several companies have managed to maintain or increase their customer loyalty this year. In this list of notable examples, we analyze what these brands have done right.
Not surprisingly, brand loyalty is especially weak right now in the auto industry. Less than one of every five people who purchased a car this year stuck with the same brand. But the one company doing well is Ford. Experian Automotive recently released a list of the ten vehicles with the strongest brand loyalty, and six of them were Ford cars, with the Ford Fusion topping the list. Some argue that Ford is benefiting from GM’s failure, picking up their unsatisfied customers.
And unlike many of its competitors, Ford has managed to weather the economic downturn without asking for money from the government, thereby building more consumer confidence. In fact, Ford planned ahead and started offering more fuel-efficient cars for an affordable price. This, combined with a long history of service, may make Ford America’s default car company for years to come.
Twitter may be the new darling of the social networking community, picking up users every day, but Facebook holds onto its users longer. Facebook and MySpace both have retention rates of 60 precent compared to Twitter’s measly 40 percent.
In fact, according to one statistic, 60 percent of Twitter users quit within the first month. But while MySpace may match Facebook in retention rates, Facebook is also managing to pick up more new users each month, making it the dominant force in social networking.
One big reason for Facebook’s success is that it continually adapts and modifies the site. Every few months, the page gets overhauled with added features such as news feeds and unique ways to find and reconnect with other users. Not all of these changes are popular, but the site has gotten better about listening to its users and tweaking their updates accordingly.
It should come as little surprise that Apple has the highest brand loyalty of any computer company. For the last two years, Apple has shattered competitors in its American Consumer Satisfaction Index, which rates customer loyalty.
Even if you’re a PC person at heart, you can’t deny that Apple has done an incredible job marketing its products and building a large cult following. (It doesn’t hurt that their ad budget is half a billion dollars.) When Apple introduces new items at its annual conferences, customers wait for days on end to get the first version of the product, in good economic times and bad. If that’s not customer loyalty, we don’t know what is.
It turns out that America really does run on Dunkin. The breakfast giant has beat out Starbucks for customer loyalty in the coffee department for the past three years, after having been trounced by them every year prior.
This may be as much a product of Dunkin Donuts’ good attributes as Starbucks’ bad ones. According to Forbes.com, Starbucks abandoned its “strong brand identity as an experience-heavy coffee shop, one that gives customers a chance to slow down and smell the coffee.” Without this unique experience, customers feel less inclined to throw down more money for drinks when they can get comparable products for much less at Dunkin Donuts.
Brand Keys, the research group who released the rankings, believes this is enforced in the current economic climate.
“Today, value matters more than ever to consumers, and in terms of service and quality and variety, Dunkin’ has been able to meet consumers’ very high expectations in a tough marketplace,” the group said.
Everyone has their beer of choice, but it turns out customers are more devoted to this Boston craft beer than other brewery titans like Budweiser and Heineken (who ranked second and third on Brand Key’s list this year, respectively). As Fast Company describes, it, Sam Adams “is a product with unusual consumer engagement profile and a tenacious brand appeal.”
In fact, the company’s founder deliberately tries to build an “emotional attachment” between customers and his beer with ad campaigns like the “Take Pride in Your Beer” series. It has since spawned a popular Facebook group where members eagerly discuss new brews.
Still, much of Sam Adams’ success is due to the quality of the product. Last year, when Sam Adams first climbed into the top spot, overtaking Coors, Brand Keys reported that the biggest factor was the beer’s “full-bodied taste,” which is the main determinant for customer satisfaction in the beer category. This continued to propel the brand in 2009.
While other companies have lost their reliable customer base, surveys show Cheerios has actually increased their highly-loyal customers by 6 percent during the recession. It currently has the most brand loyalty of any cereal, according to Brand Keys.
One expert credited Cheerios’ continued popularity among consumers to its message control. Cheerios continues to market itself as a product that’s good for children and family, pushing its proven health benefits. These meaningful messages resonate well with consumers.
Cheerios should be on the lookout in the coming year, though: Kellogg’s brand loyalty is on the rise, driving sales up, and the company is even currently considering using lasers to etch their brand name on each piece of cereal. Now that’s branding!
In honor of the World Series champs, I have to include this one. According to one study, the New York Yankees currently have the strongest brand outside of their hometown of any sports team. This is undoubtedly a result of their long and storied franchise history.
At home, the Green Bay Packers have the best brand loyalty. Perhaps that’s because people in Green Bay have nothing to do except watch the Packers play.
How to Get on TV: Give Your Business a Boost
Store Versus Name Brands: Should You Go Generic?
By Seth Fiegerman for MainStreet