Brand Building Best Practices | Loyalty: Our notion of loyalty needs updating to match reality of today’s India
Young Indians expect the best,
and will change quickly to get it
Vice President and Strategic Planning Director, Bangalore
J. Walter Thompson
“Brands can enjoy higher loyalty, but only if they very substantially improve their penetration. A loyalty-first approach is simply not a growth strategy.”
Jenni Romaniuk and Byron Sharp, in their book, How Brands Grow Part 2
Market evidence shows that brands that are bigger in size tend to have more loyal consumers. However, for a brand to become bigger in size, it requires attracting new consumers. This seems like the chicken and egg dilemma.
Rather than attempt to resolve what comes first—loyalty or size—I feel we need to update our notion of loyalty to match the cultural and economic realities of India’s current and future consumers.
Here are some reasons why the concept of loyalty is becoming irrelevant in consumer lives:
Exploring, experiencing and experimenting is in. Today, India is an exciting market because of its vibrant youth population and optimistic outlook, which are driving growth through adoption of new products and categories. Young affluent consumers in urban India, at least, seem to have caught up with the world and the rest of India is in a race to catch up to them.
It’s a fickle world out there for these young influencers. They can get unfriended for a poorly expressed opinion, broken up with over text or Whatsapp, ghosted for no apparent reason, and overlooked merely because someone else looks better—not necessarily in real life, but on Tinder.
The possibility of better options makes for complex decision-making. “I feel compelled to do a lot of research to make sure I’m getting the best,” Aziz Ansari says in his book, Modern Romance. Is he talking about the book’s subject, the epic search for a soulmate? No. Just the elaborate process he goes through to decide where to have dinner. It’s difficult to settle on just one choice when you know that there may be better choices out there.
An “upgrade mentality” has taken hold. With limitless possibilities and an overwhelming array of choices, young people are finding it easier to move away from extended families, switch jobs and cities, even drift in and out of relationships. Just like they turn in their phones for a newer model every year, they can also switch to a better job, move to a better city, find better friends and partners, and completely remodel their lifestyles when they choose.
Switching is easy and low-risk. Many new brands desperate for market share tend to buy consumers rather than earn them. Promotional deals, price-cutting, discounts, and exchange offers, all make it easy to make a switch and rationalize the change.
In this fast and fickle world, some brands do manage to sustain and nurture their consumer relationships—and build loyalty. Not because they have a magic formula to promote loyalty but because, deliberately or otherwise, they have built something consumers value more than the shiny appeal of something new. Loyalty is an outcome for a brand, not an action. There are steps brands can take to achieve that outcome (Please see sidebar).
Brand Building Action Points
1. Simplify choice by building familiarity
There is value in promoting some consistency in the brand communication and offering. It’s easy to select what’s familiar when the other choices are too many and too complex. It’s not mere chance that many big brands—like Colgate, Coca Cola, and McDonald’s—only make small incremental changes over the years.
2. Encourage a habit with a predictable sensorial cue
The taste of Amul butter, the typeface of the Times of India, the aroma of Nescafé—sensorial cues—are comforting and habit-forming. Habits are stronger and much harder to break than mere affection for a brand. Consumers resist changing their habits.
3. Be secure and not too needy
Brands, just like people, can come across as desperate and needy when they chase consumers in overt and obvious ways. People place higher value on things they need to work for compared with things that come more easily. Apple’s limit on promotions helps keep the brand more desirable.
4. Be loyal
Loyalty given is loyalty earned. It’s not just consumers who can be fickle. Brands can be fickle too. They often change target audiences and products without concern for the shock loyal consumers may feel. Find ways to reward loyal consumers for sticking with the brand. Maggi’s Me Aur Meri Maggi (Me and My Maggi ) campaign celebrated and strengthened its emotional connection with loyal users, who then stood by the brand when it went through its food safety crisis several years ago.
5. Acknowledge that loyalty is old-fashioned
It’s unrealistic for brands to expect loyalty from consumers who have already lowered their standards of loyalty in personal and business relationships. Creating variety through a portfolio of products to satisfy core customers can help retain promiscuous consumers. But using the variants to attract new users to the brand is a more effective strategy. When new users come into the brand, they make current users see it in a more attractive light. No young person likes to be in a relationship that’s stifling.