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Lou Lasday: Brand loyalty is a two-way street

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  • | 6:00 p.m. October 6, 2006
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Lou Lasday: Brand loyalty is a two-way street

Marketers want customers to be loyal, but are they loyal to their customers?

Check the list of best-selling business books, attend a marketing seminar, or read your own trade journal and you're sure to see and hear headlines shouting, "Brand Loyalty!"

The premise, to academically mystify the advantage of the repeat customer, is to bind the buyer to the seller. Brands are an unwritten promise assuring quality, continuity and purpose. They are to build relationships that grow, mature, and advance to meet the needs of their audience.

In the case of Gulf Coast professional service organizations, the brand could naturally be the corporate name on the door or the brand could be you as an individual. It's true; you could be a "one man brand."

Branding Is Everything

Branding is good. Loyalty is great. And, when you combine the two, you have the best of both worlds and you know your branding effort is successful.

Every marketing organization - including Gulf Coast professional services of law, banking, real estate, mortgage, architecture, accounting and more crave this brand loyalty. Branding is not just for corn flakes anymore.

Nationally acclaimed marketing guru, Fred Richfield, defines loyalty in the Harvard Business Review as "The Willingness of an individual - customer, client, employee, friend - to make an investment or a personal sacrifice in order to strengthen a relationship." Loyalty therefore, is indeed a big deal.

Loyalty affirms the firm's profitability, the argument goes, because it costs less to sell and service loyal customers. It is key to driving top line growth. If present customers remain and you bring in new customers, profits should eventually increase.

The Cheering Section

Additionally, loyal customers are supposed to become cheerleaders for your brand. They may recommend it; talk it up on the golf course, in the board room, at the water cooler, the theatre, the club, the church or temple. A real loyal patron becomes a missionary salesperson. Call him an "advocate." At the max, the advocate will insist that friends and neighbors try or buy "my brand" and sometimes harass them until they do.

A person is brand loyal when he or she buys the same brand over and over in a marketplace where there are reasonable substitute choices.

The most common reason for brand loyalty is obviously customer satisfaction. The buyer must be satisfied with the way the product or service performs, feels there is a fair price-value relationship, is easy to acquire and make good use of.

So far, everything sounds simple, easy and without conflict. Except for the nagging question: Why do so many people switch from brand to brand. Why are they always trying something new and different in spite of the fact that they seem to be perfectly satisfied with the brand they use most frequently?

According to the American Marketing Association, the consumer product and service categories show that fewer than 5% of the brand customers are in the advocate category. Fewer than 20% are really loyal at all. That's true, even when they say they are satisfied.

Why is that? Marketers explain the apparent lack of brand loyalty in any number of ways. For the most part these are not things the marketer did wrong. Instead, they are things that advertising, public relations, friends or contact points do to alleviate the clear benefits of the brand.

Loyal To Whom

Consider this premise: Brand loyalty doesn't exist for many products and services, and is declining for those who have a modicum of it, because the marketing organization and the brands are not loyal to the customer. Let's say it another way: marketers want customers to be brand loyal, but marketers commonly fail to be loyal to their customers.

As a Gulf Coast provider of professional services, do you recognize your loyal advocates? When was the last time you sent a quality advertising specialty gift with a short personal handwritten note? How about an information-pertinent article from your trade journal with a short personal handwritten note, or an invitation to your professional seminar with a short personal handwritten note? Or, to a breakfast with an outside authority speaking on a timely subject, or a newspaper article of a birth, a graduation or on any positive life event of the advocate?

It's really not that difficult when you consider this loyal audience may be only 5% of your client-customer base. Make a conscience effort to do this and you'll be contacting this loyal group three or four times a year with a personal note, "thank-you" offering and your relationship building attitude. It's the golden rule of loyalty marketing: Be loyal unto your customers as you would have them be loyal unto you!

Brand loyalty isn't a one-way street. It is not something the customer gives to the brand; it is something the brand earns. It's a reciprocal process with both buyer and seller getting acceptable benefits. And that value must be balanced, with the customer getting as much from the brand as the brand gets from the customer. When this equation gets out of balance, one side or the other generally will withdraw from the relationship.

Is there a one-way street this relationship can travel? No, it must be a two way street so you can travel the road together!

Lou Lasday, an independent marketing advisor residing on Longboat Key, creates action-oriented Strategic Marketing Initiatives for Gulf Coast emerging companies. A career Direct Response Executive; he has been a general partner of a major national marketing communications firm and Regional President of the American Marketing Association. Mr. Lasday can be reached at [email protected]


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