Gone are the days when sticking to one product or name was the thought process of consumers. With changing preferences, rising options and digitizing economies, the concept of brand loyalty is becoming elusive by the day. This interesting incidence has been highlighted by the global measurement company, Nielsen in its Global Consumer Loyalty Survey (Q1, 2019).
The findings show that the followers of 80/20 rule of marketing might just have to tweak their strategy as marketers can no longer expect 20 percent of their portfolio to drive 80 percent of their sales because brand disloyalty is on the rise.
In terms numbers, the increasing disloyalty can be seen from the fact that only 8 percent of global consumers are loyal to the brands and products they’ve always bought; the rest of them are disloyal in the sense that they won’t continue buying the same brand over and over. In the US, this percentage is around 9 percent; the same is staggeringly low in Pakistan – only 6 percent consumers being considered brand loyalist.
The key factors identified for tempting consumers to try a different brand or switch altogether are the value for money, price/promo, superior quality/function, and convenience, largely in that order. However, demographic as well as economic categorisation also acts in determining which influencer takes precedence. In Pakistan, value for money is the top most factors in influencing a switch or a consideration to switch.
Consumers today are on the lookout for new brands, ready to at least try new names actively or passively as the competition rises, and they are continuously bombarded with information and awareness for better, improved or just an equivalent version.
The crux of the study is that brands can no longer bank on loyalty of the consumers to succeed. It makes little sense to focus on this small segment of the population. Brands could yield better results if they start focusing on the 90-95 percent of the population that isn’t brand loyal anymore. Strategising for population that is enthralled with new products, varied choices and increasing domestic catch-ups with global players can be the trick in the developing countries.
And when a developing country is going through an economic turmoil - as the case with Pakistan – staying loyal to brands becomes even more difficult. As GDP growth slows, inflation rises, currency comes under continuous devaluation threat, interest rate continue to spike, and the distinction between necessity versus comfort of luxury becomes stark, brand loyalty becomes an irrelevant concept.