Voting offers people the opportunity to make choices. With
those choices come consequences. And while we all may have our minds on another
election, the votes are in and counted when it comes to who won the brand
loyalty race this year. We’ve just published the 16th annual list of brands
that have won the hearts, votes, and loyalty of our notoriously fickle
citizenry.
Consumers, as any marketer will be quick to tell you, no longer
choose a brand for life, but that doesn't mean they don't emotionally bond with
brands – long enough to have real consequences as regards a brand’s
profitability. In fact, our research demonstrates that consumers are more willing
to engage with brands than at any other time in our history – it’s the seat of
power that has shifted. Consumers are the "deciders," as one former President would say. And the brands that can meet or even exceed their
expectations win a loyalty that exceeds anything remotely rational.
There have been consequential shifts in the kinds of brands
making it to the top-100 (for the complete 2012 Loyalty Leaders listing, click here).
They prove the link between emotional engagement and brand dominance, and that’s
made crystal clear by the technology brands that consumers elected to this
year’s list. Is it a surprise that Apple took three of the first five spots – for
tablets, smartphones, and computers – in what have become ever more complex and
demanding categories?
What’s Apple’s campaign secret to winning votes? The answer:
Apple does it by better meeting or exceeding expectations that consumers hold
for the loyalty drivers in the categories where Apple competes. That phrase
“the categories where Apple competes” is the critical issue because the results
in our national survey proves that measuring real loyalty is a
category-specific business.
In looking at 83 products and services categories, surveying
over 49,000+ consumers, about 598 brands, it’s clear that consumers do not
engage and buy in one category the same way they do in another. While we all
may have differing opinions about politics, we can agree that nobody buys a
tablet the same way they buy toothpaste, or a smartphone the way they buy
spaghetti sauce or choose a social network!
This validated approach fuses emotional and rational
category attributes with product benefits and values, and then identifies the category-specific
purchase drivers. More importantly, it also identifies the expectation levels held
for the loyalty drivers for the Ideal product or service.
Then, if you measure a brand against those drivers, you’ll
see that brands best able to meet or even exceed expectations consumers hold
for those drivers, see higher levels of loyalty than those that don’t. Not
sometimes. Always. And because loyalty correlates extremely highly with
positive consumer behavior it also – axiomatically – correlates with sales and
profits. So it’s an economic-indicator brands can always count on.
If you doubt that fact, check out Apple’s stock price and
capitalization numbers. Last week Apple reported that revenue for the period
ending September 29th rose 27%. And revenue for the full fiscal year was nearly
$157 billion, a number that exceeds the combined revenues of Facebook, Google,
and Microsoft. Identifying the real drivers of loyalty is an interesting
exercise for marketers because once you know what they are it becomes difficult
not to understand how one brand ends up more loyal customers (and sales and
profits) than another. Consumers (and politicians) are entitled to their own
opinions, but not their own facts.
Take, for example, what drives loyalty in the Tablet category:
- Brand Value (Is this an innovative brand I’m proud to be seen with?)
- Advanced Design (Does this brand set the bar for the category and does it provide intuitive, organic connections for me?)
- Features (Does it have everything I want and does it provide me with more than I thought was possible?)
- Hardware/Software (Does the brand support more apps and is it most advanced system available?)
OK, which tablet brand answers those questions best? Apple
met customer expectations for this category by 96%, and revenues from the iPad were
up 9% to more than $7.5 billion. And that was before they announced the smaller
iPad Mini. If you said “Amazon,” you were close. They were #2, at 92%. Unlike
political elections, when it comes to loyalty, coming in second in highly
competitive categories is nothing to complain about.
Let’s take a look at another category. What are the drivers
of loyalty in the smartphone category?
Availability of Apps is first-most important, followed by Product
Design, Brand Value, and Connectivity & Ease of Use. Again, ask yourself (in
a fair, balanced, non-partisan way, please) which brand best meets consumer
expectations in an extraordinarily demanding category?
You can debate all you want over a couple of brands, but
Apple is #1 at 87%, reporting its fiscal 4th Quarter up 24%, based largely on
the sales of the iPhone. It would have been higher but the company couldn’t
supply enough of them to meet consumer demand. For sure the loyalty poll shows
that Blackberry isn’t measuring up to those category drivers. This year it’s
#100 on the list (down from #60 last year) and only meeting customer
expectations this year by 74%, with 3rd Quarter profits down again.
Did the Blackberry assessment and returns (or lack thereof) really
surprise you? What might is the fact that because loyalty metrics are predictive
of what consumers are going to do or purchase 12 to 18 months down the road,
with the right loyalty metrics in place Blackberry could have known how
consumers were going to vote with their hearts and pocketbooks back in June. No,
not 5 months ago. We’re talking about June of 2011.
And, while rankings like this list are interesting, the real
reason to pay attention to loyalty issues is that they’re leading-indicators of
profitability, which is something that ranks high on every brand manger’s list.
And something every marketer will support and every shareholder
will vote for!
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