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 US 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 (see the Brand Keys site for the complete 2012 Loyalty Leaders listing). 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 the 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!