My name is Michael Ewer, I am the Principal Lecturer in the Marketing faculty. So in thinking about this blog entry I have been considering what I am passionate about, I will put education aside, as of course I love what I do and I stand by it, and our students, but the other thing that I am passionate about is loyalty, brand loyalty to be specific. So to write this blog I will address something that I have been seeing for a while now and it is also an issue that is raised by many a marketing person, that modern consumers are not brand loyal…
Before we can answer that question we have to ask about human nature, has it changed? Are we a different animal to previous generations? I think we have to say no to that one. As much as many Gen X and others may think, Gen Y is no different to the rest of us, genetically anyway, they don’t have gills, a really cool tail or sticky bits on their hands that let them climb walls. They are pretty much the same as the rest of us. You see, I and many of my generation are traditionally loyal, we find a brand that works for us and we lock it in, we may stray now and then but we more often than not come back to the brand we love, we know them, they have been beside us for years. Now and then the brand may let us down, but we are very much like that old faithful dog that keeps standing by its owners side.
So what has changed that makes Gen Y stand out from other generations as ones that are more likely to switch brands more than others? I have to blame ourselves, Marketers that is, what have we done or perhaps not done to this group that we have done with previous generations? Well one of the things that has changed is our use of promotional tools, which ones we rely on more and which ones we drag out when we are under competitive attack. In time, consumers react and change based on our marketing activities, so in effect, we get what we create. See many years ago we marketers loved Advertising, the fancy TV ad, big newspaper spreads and radio were king. These however were not always that good in making people respond, sure they are brilliant at increasing awareness but do they in themselves make a consumer action their purchase? Probably not. One other thing they do fantastically well is strengthening the brand message, that a company is reliable, a good bet and worth standing by. The thing is though… that it does not always lead to instant sales, it’s a great long term investment but for the short term unless you link it to something special in the short term, the response is not always the best. Through the 90’s there has been a shift, a change in where the power lies within the organisation, and I think we can safely say that the bean counters are it now. The change then to marketing is that for every promotional dollar we spend it needs (more often than not) to be linked to a pretty quick return on that investment or do you know what Mr Marketer? You’re out mate.
So as a response, the marketing folks have moved the focus of our promotions, sure we still use the mainstream media, although not as much as we used to, but we focus on another promotional tool, Sales Promotion. Now how this works is that it is a demand stimulating activity, discounts, bonus offers, competitions and the like, that get the consumer to respond right then and there. Don’t get me wrong, these are great and it’s a great way to steal customers from your competitors but the problem is that we all use them and we all use them too much, once you do it, your competitor does it too. Then the cycle begins, what we do is we train our customers to be brand switchers, all they have to do is wait long enough and the product will be on sale, there will be another coupon from another supplier to buy if their last brand does not, and they move to the brand that does, and then back and forth.
What we are in effect doing is telling our consumers that it is stupid to be brand loyal, that if they buy our product all the time at the high price then we will slap them in the face a few weeks later when we offer a discount, where is the love there? Here is an example, I like a glass of wine now and then, I have my favourite wine and I buy it pretty regularly. Normally I will pay about $16.00 a bottle for a particular brand, I will either buy it direct from the winery or the bottle shop. Yesterday I received an email from one of those daily deals companies with one of my favourite bottles of wine that I normally pay $16.00 a bottle for ½ price! Of course I buy a few but I am now buying on price rather than any form of loyalty or commitment to the brand. Now will I go back and pay $16.00 again? Not on your life, its now worth $8.00 to me and I will wait until next time I see it at that price too. I have also now begun my training in looking for other wine of high value that is discounted. So is this a good thing? As a consumer, of course, its great we get to save some money and try new brands. As a marketer though we have just lost a loyal customer and encouraged them to buy on something that can be easily copied by competitors, price.
There is of course a lesson behind all this, give your customers something to love, to madly and deeply fall in love with that transcends the issue of price, give them the best product that you can, something that your competitors can’t do, give them a great experience/service, a great relationship with the brand and one that you won’t betray. Then and only then will you have a strong loyal customer no matter what generation they are from.