A Lesson on Brand Loyalty
Wes Berlin was a fellow marketing professor at the University of North Carolina Wilmington. Wes’ teaching style was to tell “war stories” of his experiences as a sales executive at IBM, as well as anecdotes from his personal experiences. He earned very favorable teaching evaluations and was a perennial favorite of the students.
During a lesson about brand loyalty, Wes told the students that he had been very loyal to one brand of razor for many years, and paid a premium price for that brand of razor because he believed it was superior to other brands. On one vacation, he forgot to bring his razor and was unable to find his preferred brand in nearby stores. So, he bought a competitor’s low-priced razor. Wes was surprised to find that he got a better shave with the lower-priced razor than with the premium-priced razor that had been his favorite brand. He felt betrayed by the brand he used to love, and switched to the lower-priced razor for the rest of his life.
Although Wes had previously exhibited strong brand loyalty, his inability to find his preferred brand at the stores he searched resulted in an attitude shift that significantly changed his brand loyalty and purchase behavior.
Two Types of Brand Loyalty
There are two types of brand loyalty. One type is behavioral brand loyalty, which is a consumer’s repeated purchase of the same brand. Brand managers love to see consumers exhibiting behavioral loyalty to their brands, often making repeat purchases of a preferred brand without even considering whether to buy a competing brand. By repeatedly buying the same brand of razor over and over again, even at a price premium, Wes exhibited behavioral brand loyalty.
However, a pattern of repeated purchase does not necessarily mean that a consumer feels loyal to a brand. Consumers might repeatedly purchase a brand because it is stocked on a frequently passed end-of-aisle display, because a parent used it, because it is less expensive than other brands in the category, or for other reasons. Brand loyalty is not simply a behavior. Loyalty is also a belief or feeling. That brings us to the second type of brand loyalty.
Attitudinal brand loyalty is a consumer’s acknowledgement that they repeatedly purchase the same brand because they think it is the best choice for them, or because they have strong feelings of attachment to it. Wes repeatedly purchased the same brand of razor, and paid a premium price for it, because he believed it gave him the best shave he could get. That belief, or attitudinal brand loyalty, caused him to repeatedly purchase the brand, which demonstrated his behavioral brand loyalty.
Brand Loyalty Can Immunize Brands from COVID-19 Stockouts
One response to the COVID-19 pandemic has been that consumers have stockpiled certain types of products, such as toilet paper and disinfectant wipes. Retailers have frequently sold out of these types of products, creating a situation referred to as a stockout, meaning that the brand or product is out of stock at a store. Stockouts can be a test of consumers’ brand loyalty.
Consider a consumer who is attitudinally loyal to a certain brand of toilet paper because they believe it to be softer or more absorbent, and demonstrates behavioral brand loyalty by repeatedly purchasing the brand. But, due to a stockout of the preferred brand, the consumer purchases a competing brand of toilet paper that is in stock. If the consumer uses the competing brand and finds that it is as soft or as absorbent as the preferred brand, that can cause the consumer to change their attitudes and their purchase behavior. They may no longer think the preferred brand is better, thereby reducing their attitudinal brand loyalty. In turn, they may switch some or all of their purchases to the competing brand, thereby reducing or eliminating their behavioral brand loyalty. This is what happened with Wes and his razor.
Brands that truly provide the benefits they promote may be able to overcome stockouts and maintain brand loyalty. If the preferred brand of toilet paper really is softer or more absorbent than a competing brand, then consumers who switch during a stockout will recognize that the competing brand is inferior, will remain attitudinally loyal to the preferred brand, and possibly will become more behaviorally loyal to the preferred brand when it is again in stock.
However, brands that promote benefits that are not supported by product performance may find that consumers who switch to competing brands during a stockout don’t return when the originally preferred brand is back in stock. Their attitudinal brand loyalty has vanished, taking their behavioral brand loyalty with it.
Measuring Both Types of Brand Loyalty
Marketing research can help marketers understand whether a brand has gained loyalty from its consumers, and if so, which type of brand loyalty consumers exhibit.
There are several ways to measure behavioral brand loyalty. One way is to track consumers’ retail purchases over time. Physical retailers may use a loyalty card, phone number, or other customer identifier to record purchases over time for an individual shopper or household. Online retailers may use a customer account or user ID for the same purpose. These methods allow retailers to explore whether a customer is repeatedly purchasing the same brand over time, and whether they are also purchasing any competing brands. A brand manager may be able to purchase this information from retailers or marketing research companies to measure the percentage of consumers who only purchase a certain brand, the percentage of category purchases accounted for by a certain brand, or other measures that indicate behavioral brand loyalty.
Another way to measure behavioral brand loyalty is through a consumer survey. A survey can ask consumers questions to measure what brands they have purchased in a category in a certain period of time. Responses to such a survey would allow a marketer to understand the percentage of consumers who have been loyal to a brand over a certain period of time, the percentage of category purchases accounted for by a certain brand, or other measures that indicate behavioral brand loyalty.
Consumer surveys can also be used to measure attitudinal brand loyalty. A survey can ask consumers what they think and feel about a brand, whether and how a brand is perceived to be differentiated from competing brands, whether and how much they prefer it over other brands in a category, whether and how likely they are to consider competing brands, whether and how strongly they feel attached to the brand, and other measures that indicate attitudinal brand loyalty.
Measuring Brand Loyalty for Your Brand
Brand loyalty can immunize brands from brand switching during stockouts. For help measuring whether your brand has developed brand loyalty, whether that loyalty is behavioral and/or attitudinal, and how to create or strengthen brand loyalty for your brand, contact MMR Strategy Group at firstname.lastname@example.org.
Dr. Justin Anderson
Senior Vice President
MMR Strategy Group