Don’t expect monogamy from your loyal customers

Is loyalty dead? Probably not. But is it monogamous? Also, probably not. In a market driven by competition and where consumers are pampered with price cuts and bold bright discounts, their relationships with brands are no longer as long as they once used to be.

Agreeing to this was Madhav Nayak, marketing director for Southeast Asia, Australia and New Zealand at Unilever. He says in the FMCG industry, there is a lot of talk that consumers are not seeking long-term relationships with brands and are just “light users” of a brand.

Hence, one of the questions plaguing marketers is how to ensure consumers are using their brands more often.

“In an era where people are struggling to make a relationship with each other, it is a big assumption to make that consumers are waiting for brands to reach out and forge a relationship with them,” he said.

Chances are today, your consumers who are buying your products are also purchasing your competitors, said Wong Wan Ling, consulting and strategic marketer for banking and technology sectors.

A person purchasing a Coke today might very well be purchasing a bottle of Pepsi another day. A Burger King dinner doesn’t mean no McDonald’s breakfast a week later.

“Marketers sometimes assume that loyalty is a monogamous relationship. Unfortunately, in the real world, loyalty can be polygamous. Just because I use one brand of shampoo doesn’t mean I don’t have other brands on my shelf,” Wong said.

But does that mean loyalty is now gone?

No, said Wong. It simply means the frequency of purchase has reduced, but the loyalty is still there. Marketers should be ready to share their loyal customers.

“You shouldn’t be looking for sole relationships, but rather, higher share of mind and frequency,” she added.

Martin Benda, global strategic development senior manager at Aimia, explained that loyalty is not dead, but the rules to playing the loyalty game have changed.

“Loyalty is not for everyone. It is not for every industry. But the concept of transaction and being rewarded is still alive,” Benda said. Today, loyalty means different things to different consumers, but ultimately, marketers should sift through their customer data and profiles to use loyalty as a way to develop a relationship to reward your high-value customers.

Wong is of the view that the concept of “earn and burn” loyalty points is probably gone. Loyalty can breed only in an emotive context, but brands in certain sectors cannot forget the transactional elements.

“The reality for payments and banking sectors is that financial transaction loyalty is still important to the banks. The more they transact the more money they make. Transactional loyalty is thus important to the companies in the banking industry,” she said.

But experts agreed that at the end of the day loyalty should not be used to fix a broken relationship with consumers. The basics need to be in place first, and products must deliver on their brand promise.

Nayak said one of the most neglected parts of loyalty was product quality. That is what will, at the end of the day, keep a marketer’s consumer base loyal.

“As yourselves, are you delivering on what you said and are you delighting your consumer? Every time you offer something, you make a promise. If you do, people will buy you. If you don’t, you are punished. It is as fundamental as that,” he said.

He added that people today are time-starved and don’t have time for false claims, and smoke and mirrors. He also said for his industry, finding powerful motivators are far more effective in driving loyalty than monetary incentives.

“We promote a lot and so do our competitors. The differentiation comes when we find something that our consumers identify with and finding that becomes a huge competitive advantage. The emotional connection matters.”

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