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Sunday, October 30, 2011

Loyalty...a forgotten quality

By Dick Hirsch

Nothing is the way it used to be. No matter how old you are, I’m sure you have discovered that. Cycles seem to dominate; either matters are on the way up or they are on the way down. Pizza is a handy example. We have more pizza purveyors per capita than most places, yet even in a dreadful economy, aspiring entrepreneurs are investing in and opening new pizza parlors.

Don’t they know that everyone already has a favorite source for pizza, the supplier they have relied on for years? Each such favored place has a reputation for providing crusty and succulent pies, the best available, laden with cheese as well as an array the popular toppings, always generously applied. And the sauce, oh, the sauce; in a superior class by itself. Besides all that, they are reliable, delivering on time, and the prices are fair. There is no reason to seek another source, right? Wrong.

Yes, wrong. There may not be any obvious reason, but the majority of customers are so fickle they will find a reason. Pizza is just a homely example, used here to make a point: we are currently deep in a cycle during which loyalty is continuing its long decline. Before that approach became so common people would actually become advocates for their suppliers, recommending them and the services or merchandise they supplied, extolling their virtues.

Now the era of brand loyalty is over. The market place has been commoditized. More and more consumers are either unable or unwilling to differentiate by brand. Rightly or wrongly, they have come to believe they are all the same. In the old days, everyone had a favorite brand. Cigarettes haven’t been certified and embraced for years as examples of marketing success. Now the only cigarette smokers are the addicted and those who believe they are immortal. However, once cigarettes were the best example of brand loyalty. Those involved in tobacco marketing offered seminars detailing their methods and listing their sales successes. People really would walk a mile for a Camel, insist on Lucky Strike or call for Philip Morris. A survey some years ago disclosed that 71 percent of all smokers were loyal to one brand, straying only in rare circumstances. I can remember discussions that ensued among persons who were regarded as relatively intelligent, each explaining the many positive qualities of the brand they preferred...smooth, mellow, satisfying, milder; that was the epitome of brand loyalty.

Gasoline provides another illustration. I suppose there are still a handful of motorists who use only a particular brand, but gone are the days when a driver would insist on Texaco, Gulf or Exxon, dispensed by those familiar guys at the gas station in the neighborhood or on the route to work. Gas is just a commodity now and there are very few places where there are any familiar guys, even unfamiliar guys, who will wash the windshield and check the oil. They disappeared. What happened to all of them? What are they doing these days? They helped to create brand loyalty and now they are missing in action.

Gasoline is a convenient example but there are so many others: toothpaste, canned goods, bread, detergent, breakfast cereal and soap are just a few. Brand loyalty is virtually dead, a victim of changing attitudes among consumers. More consumers are buyers, not customers. There is a major difference. The buyer is motivated by price, determined to find the least expensive. The customer is more likely to consider other factors, such as brand recognition, anecdotal evidence or personal experience.

Price is dominant. The manufacturers and merchants created that atmosphere. They created the private label products, emphasizing them rather than established name brands. They made price the critical consideration. They advertised sales every week. The sale formerly was a once-in-a-while promotion. Retailers depended on periodic sales to bolster volume. Sales now have become so regular it is difficult to know whether the stores ever sell anything at the regular price. And, if they do, who is buying?

So price trumps quality, convenience and other factors that once were part of the decision-making process. There is another issue that needs to be mentioned because it, too, has a major influence on shopping: choice. There are too many choices, too many models, versions, flavors, colors, sizes or other variations on the basic theme. Yes, it can be maddening, but is part of the equation; if you can find what you want on sale buy it. Loyalty has been eclipsed and forgotten.



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