A new understanding of loyalty is challenging brands to get smarter about how they can generate brand enthusiasts.
About This Trend:
As switching from brand to brand becomes easier and technology continues to empower consumers with more information and access, today, brands are learning that there is a serious difference between the two forms of loyalty. One is passive, or loyalty of convenience, and active, or loyalty of belief. And the more they discover, the more they appreciate that while customers chase better deals and reward brands that offer them, there is a difference between looking for convenience and actually loving a brand.
While companies are investing more and more effort in trying to entice customers to be loyal — most of the so-called loyalty they are generating is loyalty of convenience. Take the example of auto insurance: encouraging customers to switch (i.e. ads by Geico and Progressive) are more effective, as most people stay with their carriers out of inertia, not loyalty. Apple has a “Switch to iOS” app, and Google has a “quick switch adapter” to move iPhone content to Android phones with 3 simple buttons.
Stories & Examples
- Research provider Colloquy found that the typical American household has memberships in 19 loyalty programs but is active in only 12.
- According to consulting firm Maritz Motivation Solutions’s 2016 LoyaltyNext Customer Study, only 17% of those in loyalty programs say that they joined out of love for the brand’s products, and just 5% because of a shared identity with brand values.
- Both Apple and Android expect more than a million switchers to leave one carrier for the other in the next year.