According to Richard Jones, CMO at Cheetah Digital;
- Today’s consumers demand more from brands. They don’t want to be judged solely by what they buy or how much they spend. Consumers want personalized experiences.
- Historically customer loyalty was defined by three metrics, recency, frequency and monetary.
- Today’s definition of customer loyalty has evolved to encompass all engagement a customer has with a brand whether it be via social media, in-store or online visits. These engagements go beyond driving the customer simply from one purchase to the next.
Customer loyalty is dying for certain product categories, mostly in the grocery store. Mr. Jones feels that customer loyalty extends to all engagements but I disagree for several reasons.
First, the “engagement levels” between brands and customers are dropping. Some huge brands have huge followers on social media yet their sales are dropping.
Second, the bond between a customer and a lot of brands does not extend beyond the product itself. If a customer buys peanut butter they want good peanut butter, no more, no less. They could care less about the brand’s use of social media.
My hypothesis is that customer loyalty starts and ends with the product. When a customer buys a frozen entree they expect it to look like it does on the box. If it doesn’t they won’t be back.
There are some product categories that have high brand loyalty, however. I am an avid cyclist and I prefer Trek bikes because they build a great product. My car is a Subaru which is my 6th one. I stay with Subaru because their cars last and hold their resale value. However, in both of these cases, it’s more about the product. I did follow these brands on social media but their attempts at engagement didn’t work.
Marketers tend to overthink their relationships with their customers. They need to become a customer of their brand to understand, at the basic level, that it’s about the product first. They also need to better understand that retailers play a far bigger role in customer loyalty than they would believe.