Brand loyalty is driven by ‘trust’

In the modern age, and particularly in a challenging economy, does brand loyalty still exist? And if so, what's driving it?

Forbes recently revealed what it called the "world's most meaningful brands" based upon a new ranking system from Havas Media that aimed to measure a corporate brands' perceived positive impact on lives. The brands were ranked according to something called the 'Meaningful Brand Index', which is said to gauge people's perceptions of a brand's influence on society, environment, economy, health, and emotional wellbeing.

Incidentally, the world's 10 most meaningful brands according to Havas Media are IKEA, Google, Nestle, Danone, Leroy-Merlin, Samsung, Microsoft, Sony, Unilever, and Bimbo.

Dave Fleet, vice-president of digital, Edelman in Toronto, says brand loyalty does exist but the key to what's driving it is "trust".

"Despite the economic situation we see brands that aren't necessarily lower cost maintaining market share and succeeding and I think a lot of that comes down to brand loyalty," he said. "Companies that are trusted by the public do better. The definition of 'trust' is certainly changing. Last year (using Edelman's 'trust barometer') we saw things like 'transparency' and 'openness', they're up there alongside the quality of products nowadays."

The changing economy is partially a cause of the evolving nature of trust, he adds.

"I do think the social situation broadly feeds into that too as we're seeing things like social responsibility from companies coming into play now and how it impacts that organization's reputation in the community," he says.

With that in mind, consider U.S.-based outdoor apparel retailer Patagonia's recent Cyber Monday mailer that told its customers, "don't buy this jacket". In fact, the company encouraged people to refrain from buying anything on Cyber Monday. The effort was a part of what's called the 'Common Threads Initiative', Patagonia's environmentally focused campaign to encourage responsible shopping while combatting "rampant consumerism".

"It's certainly creative marketing," he says. "This is a positive move for their brand. One main takeaway from this is it isn't just 'green-washing' it actually gels with their brand. That appears to be what Patagonia is doing."

Marketing and building brand loyalty is hard work. Yet most CEOs believe marketers lack credibility, suggests research conducted by the Fournaise Marketing Group that found 73 per cent of company chiefs think marketers "are all fluff and not savvy enough".

Factor in the rise of social media marketing and the view that it's necessary to forge lasting relationships between organizations and customers and it's conceivable some CEOs might scoff at the whole kit and caboodle.

"The necessity of social media marketing is very much dependent on the company. However, it can be highly beneficial for companies because it lets them build closer relationships with consumers and they can put a human face on their activities," Fleet continues. "If you think of social media as 'always-on marketing', it's easier to understand. It's not an activity that's purely campaign-based in nature but one of continuous engagement."

The huge opportunity Fleet mentions isn't lost on Canadian companies evidently. A recent PricewaterhouseCoopers survey of private Canuck firms finds mobile computing and social media at the top of the technology investment list.

Ryan Holmes, CEO of Vancouver, B.C.-based HootSuite, says social media marketing provides one of the highest ROI (return-on-investment) mediums ever seen.

HootSuite is a website and online brand management service that monitors and publishes content to websites such as Twitter, Facebook and LinkedIn.

"When you look at the cost on it in comparison to email where there's a cost per throughput . . . with social that's not the case. The whole paradigm has been rewritten," he says. "With social media, people are going to talk about your company or product with or without you. If you're not there, your competitors are going to eat your lunch."

Perhaps "effort" is also a part of the equation. Customer service is a vital element for brand loyalty and part of that effort is ensuring it's as easy as possible for customers to find answers to questions. Marketing Week magazine says British Telecom (BT) is starting to measure customer effort levels to determine how much work consumers have to put into surfing a site, contacting a call centre or sending the brand an email.

Holmes enthusiastically agrees with BT's view of measuring the customer's effort to get in touch.

"I think that comes from a real perspective of leadership," he says. "I believe (customer) support is the new PR (public relations). If you think of the old axiom every marketer has heard about one unhappy customer will tell 10 people . . . add social media to the mix and you need to multiply that by 10 at least."

Conversely, word-of-mouth marketing drives brand loyalty too.

"It's exponential. If you think of the value of word-of-mouth advertising, especially in social, it comes from a valid place when my friends or family tell me about an amazing product versus a marketing message," he says. "Overall customer satisfaction can be the new advertising effectively."

Edelman's Fleet adds good customer service is a crucial element of online interaction. "Companies need to get their heads around the idea of finding a balance between interesting, engaging, useful content and corporate messaging. It can't just be 'sell', 'sell', 'sell' all the time."