When I was a wee lad – OK maybe I wasn’t so wee as I was in my mid-20s, I was a marketer working on the AARP Health Insurance account which at that time was underwritten by United HealthCare. In fact I think it still is, but that’s not the point.
The point is as myself and my fellow marketers tried to get people to switch from their existing insurance coverage to coverage provided by AARP, underwritten by United HealthCare, we oftentimes heard a common lament which was Mr. and Mrs. Smith did not want to switch their plan because they were staying loyal to their existing brand – which in many cases was Blue Cross/Blue Shield.
Oh we would lay out the fact that our plan was the exact same plan they already had only cheaper, but they were not buying it – literally and figuratively. They more often than not were steadfast in their desire to stay true and loyal to their beloved BC/BS.
That Was Then
Now keep in mind we’re talking about people who were in the mid 60s and up and one could argue brand loyalty among the older generation – especially going back 20 years, was a lot different than it is today. Times were a whole lot different. No social media, no real internet – at least the way we know it to be today and surely mobile phones were not what they are today, not by a long shot.
Consumers, regardless of age, were more likely to be brand loyal in my humble opinion. You wanted an adhesive bandage, you bought Band-Aids. You wanted a tissue, you bought Kleenex. And so on and so on.
What About Now?
Earlier this year I wrote a piece entitled Only One Quarter Of American Consumers Are Brand Loyal which touched on the findings of an Ernst & Young survey of nearly 25,000 people across 34 different markets around the world.
“On the whole across all 34 markets brand loyalty checking in just under 40% as a determining factor in making a buying decision, but, that number dropped to just 25% in the US, a highly significant decrease in the number of American consumers who say brand loyalty is something that impacts their buying behavior.”
As I wrote then and will write again here, I would’ve guessed that number would have been even lower among American consumers when it comes to brand loyalty.
And when you dive deeper and look into specific age demographics, the numbers re: brand loyalty are even more telling.
In her piece for Forbes earlier this year Why Big Retail Is Running Scared Of The Millennial Generation, J. Maureen Henderson, made reference to “a report by WSL Strategic Retail that documents how the fortunes of retailers such as Gap, Urban Outfitters and Aeropostale have been suffering in light of decreased consumer spending by twentysomethings and cautions these retailers and others in their shoes about aiming their marketing campaigns at a cohort that currently lacks spending power.”
The aforementioned WSL Strategic Retail How America Shops MegaTrends report entitled “Moving On 2012,” revealed that that 80% of millennials looked for the lowest price possible when shopping and that 60% are more inclined to bypass their favorite brand if a cheaper alternative is available.
While the percentages decrease the higher/older you move on the demographic scale, it is worth noting, as Henderson noted in her piece, “The (WSL Strategic Retail) report’s authors also warn that a generation of potential consumers who are unwilling or unable to spend will eventually hurt higher-end retailers (brands).”
In other words if they can’t afford the higher end brands now, they may not be able to afford to or even want to spend more as they get older.
The Role Of Mobile When It Comes To Brand Loyalty
I will surely not spew out the latest statistics re: the number of consumers using their smartphones and tablets to make a purchase, Surely by now you know ours is a mobile world where our smartphones have become an extension of our lives and rarely do we ever – with all due respect to American Express – leave home without it.
When consumers are out and about they check their smartphones for real time savings but surely that won’t impact brand loyalty, right?
Sponsored by AisleBuyer, a survey conducted earlier this year revealed that nearly 75% of consumers would switch brands if offered real-time discounts and promotions that were delivered to their smartphones in real time while they were shopping in a store.
Honestly I would have predicted that number to be even higher for the simple reason that, no matter who you are, or how much money you make, every single one of us likes a deal. We all enjoy saving money, don’t we? Well unless you work for the government.
But I digress.
So, the question remains.
Is Brand Loyalty Dying A Slow And Painful Death?
Or to take it a step further, has brand loyalty already died but no one told it yet?
Think about it.
How loyal can people be when Nearly One Third Of Online Consumers Trust A Stranger Over A Brand?Comments