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Build brands, not loyalty

News, 08 January 2015

LONDON: Brand loyalty should not be a marketing objective in its own right but rather the outcome of a successful approach to brand building, a leading industry figure has argued.

Writing in the January issue of Admap, Giles Hedger, chief strategy officer at Leo Burnett, described loyalty as "at best, an awkward conflation of several different indicators", including attitudinal preferences, purchase patterns and how often a product is bought, which were "bundled together in a dream-weave of sophistry".

Noting the scientific debate over whether it is better to focus on penetration or frequency, Hedger asserted that both sides were right since these are effectively different parts of a brand's life cycle. Penetration is important in the early stages but as it matures it becomes more necessary to cultivate high-value buyers within the customer base.

He acknowledged that "the exact point at which loyalty becomes a mathematically relevant component of brand building" had not been established but maintained that strategies which helped a brand in its early stages would also be effective in the later stages.

So loyalty schemes, he suggested, were not "standalone loyalty generators" but ways of "crystallising latent loyalty".

A comparison with the wider marketing tactics was instructive, with marketers generally agreed on the greater effectiveness of pull marketing than push marketing. Apply the same notion to loyalty, said Hedger.

"You can't push people to a state of brand loyalty because the psychology of loyalty does not allow it," he stated. Brands exist in relation to other brands and brand loyalty is rarely totally exclusionary: "Brand loyalties can and do co-exist".

An alternative approach would tackle the landscape of motivations in which brand loyalty exists, and in which consumers balance a wide range of factors and motivations, many of which are external to a brand's locus of operation or sphere of influence.

And that, Hedger concluded, "starts to sound a lot like brand building".

Data sourced from Admap