Brand loyalty is a principle studied in depth by all major companies. In fact, in segments like FMCG and medicine, brand loyalty goes a long way in making a company successful and sustainable. These companies then segment their customers on the basis of brand loyalty.
There are basically 4 types of brand loyal customers.
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1) Hard core brand loyal customers
In your circle of friends, there will definitely be one of the bloke who loves a brand so much that he is known to be a Hard core loyal customer of the brand. IT companies like Apple or Google have many loyal customers (I am a big fan of google).
The typical trait of a hard core brand loyal customer is that he is super excited about the brand and has only positive words for the brand. This means that the customers experience has been superb and hence he recollects the brand with this fondness. Similarly, these brands are generally good innovators and have impressed certain customers so much that these customers became hard core brand loyal customers.
Harley Davidson is a company whose brand loyalty is legendary.
As a result, the following advantages can be obtained from such customers
- They are sure to spread excellent word of mouth
- They are the best feedback resources for the company
- They are not likely to shift due to some minor changes from the company
The advantage of hard core loyal customers is that, with just a small motivation, the companies reach can be increased manifold. We can see this whenever Samsung launches a new galaxy phone or Apple launches a new iphone. Half the work of buzz creation is done by the loyal customers themselves who are waiting for the new phone to launch.
2) Split loyal customers
A customer who likes more then 1 brand but limits his or her choice to 2-3 brands, is known as a split loyal customers. These customers are an excellent target base for the company. With a little nudge and by talking to these customers in their own language, the company can turn these customers to hard core loyal customers.
However, is it easy? It is not. Most customers have an alternative choice. That’s just how business works. But by analyzing split loyal customers, you get to know and study your closest competitors and their moves to attract your customers. It is the work of the company to impress such customers so that they permanently move to 1 brand only – your brand.
An example would include Thomas cook vs cox and kings. A customer might have had good experiences while traveling with Thomas cook. But he would also have such positive experiences when traveling with cox and kings. And hence the customer is OK with both – Cox and kings or Thomas cook.
- Split loyal customers do not go crazy for one brand only. They are OK with 2-3
- They generally choose only the top brands of an industry.
- If they are effectively targeted by a brand, they can become hard core loyal customers.
3) Shifting loyal customers
A shifting loyal customer is a mixture of hard core loyal and split loyal customers. A shifting loyal customer will generally buy one product over a period of time, but then shift loyalty to another brand and remain loyal to the second brand.
An example in this case can be ice creams. Many customers prefer a brand of ice cream over a long period of time. And they remain loyal to that ice cream taste. However, once they get used to that taste, they might try some other company with the result that they now prefer this company over another. And in both the cases, the customer is loyal to both the companies, not to a single one.
There is a fine line between split loyals and shifting loyal customers. However, shifting loyal customers have much lesser loyalty then the split loyals. Taking the above example, the shifting loyal customers can at anytime choose any of the 2 or even 10 different types of ice creams. In fact, he might prefer a snow cone from time to time. These customers keep shifting their loyalty.
4) Switching customers
Continuing the above example of ice creams, you will always find someone who wont like to eat the same thing on two days. So if he ate a pizza today, he will like to try something different the next time. Similarly, if he bought a dell laptop, he will like to buy a Lenovo now. If he had bought anything from a company for the first time, the second time he will like to try something new and hence he switches brands.
Such customers are unlikely to be loyal to a brand, and more likely to keep switching even when they liked a brand. This is just because they want to experience new things. As a result, this group is targeted by most new marketers and is the ideal group to create a buzz in the market. This group is also the one most likely to fall in the innovators group when talking about product adoption.
Analyzing brand loyal customers can go a long way to build and alter the marketing strategy for the company. Hard core loyal customers can tell you the strengths of the company. Split loyals can tell you your closest competitors to whom you are losing your customers. Shifting loyals can tell you the weaknesses in your products.
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I was once told by a market research company that, generally speaking, 1/3 of the market is brand loyal, 1/3 is persuadable – switchable and 1/3 will try anything but are not loyal to anything.
How do these percentages match up with data you have?