The Future of Brand Loyalty in FMCG
‘We don’t choose brands, so much as we use brands to help us choose.’
The quotation above comes from a short video from Ogilvy Vice Chairman Rory Sutherland. In it, he offers a way of thinking about brands, which turns a traditional assumption on its head. He goes on to say, ‘…quite a lot of brand success is being down to being the kind of product which people can buy without thinking too much about it.’
Many FMCGs love the idea of a passionate customer base who don’t just buy a product, but buy into a product. They’re advocates who identify with the brand, believe it says something about them, and connect deeply with the business. In some cases that might be true, most likely for challenger brands and ethical champions, but a lot of brands benefit from a kind of disengaged loyalty.
Many people buy the brand consistently not because they feel strongly about it, but because they know a product from that brand is going to be good. They don’t have to devote any time or mental energy to work out whether it’s a good purchase.
It might not feel like a huge branding victory, but it is. The money that someone pays for your products is worth the same, no matter why they spend it.
Customer loyalty vs brand loyalty
Whether it’s somewhat detached or deeply emotional, brand loyalty is more valuable than customer loyalty. Brand loyalty keeps people buying because of something about the brand. Customer loyalty is purely transactional, driven by price, discounts, or other incentives. Both drive sales, and they can affect each other, but they’re very different in what they mean for the business.
Customer loyalty is easy to win and hard (or expensive) to keep. If people buy because the product is on offer or inexpensive, then you need to keep the product cheap or keep offering discounts, or the loyalty goes away.
Brand loyalty is hard to earn, but (somewhat) easier to maintain. People are buying because of something inherent to the brand, not something temporary like a price point. It also delivers more value to the business, since you don’t have to rely so much on squeezing your margins to keep someone buying.
Brand loyalty in the 2020s
You could pick any number of things to characterise this decade so far, but data has to be one of them. The amount of communication and information that’s available and shared is way beyond comprehension, and it’s still increasing. It would be a huge mistake to underestimate the impact that it has on brand loyalty. Here’s how.
Online shopping
Not that it’s new to this decade, but online shopping continues to grow, and 2020 only accelerated that. Online food shopping, for example, increased by 94% as a result of the Covid pandemic.
People always had lots of brands in front of them when they shopped, but eCommerce amplifies that hugely. An online search results page can hold many more products than a shelf can; online shoppers can have multiple tabs open; consumers see scores of promotions every day via email, banner ads, social media, and push notifications.
All that competition for attention and spend means that there’s less room in people’s attention for each brand, and there’s more opportunity to tempt them away. It takes remarkable brand strength and an incredible supporting strategy to maintain loyalty in those circumstances.
Cost-of-living crisis
Whether someone sticks to a brand because of principles, or because they know it does the job and don’t want to think about it any further, a cost-of-living crisis threatens that loyalty very deeply.
If people are worried about their finances, then many find cheaper ways to live. Often that involves changing their buying habits. If your brand is about economy and value, that’s obviously great news. If not, then you need something compelling to keep customers buying.
It can’t be reactive, of course — you can’t build a brand in short order to respond to sudden economic circumstances. A crisis-proof brand takes months and even years of expert crafting and maintenance.
Generational shifts
It’s obvious that demographic shifts bring with them different consumer behaviour and priorities. It’s always right to remember that, but beware of courting an audience at the expense of your brand.
For example, it’s wise to consider that different generations have different expectations of brands. For example, from baby boomers down to Generation Z, each generation has been more likely to believe that brands should take stances on social issues. You can use that understanding to shape a brand and refresh it over the years.
However, it’s unwise to chase blindly after a demographic. For example, lots of Generation Z use TikTok, but that doesn’t mean, say, that a detergent brand should rush to create an account just because it’s a popular platform. It may not work for your brand. Once again, strategy comes first.
The key to all of the above is people. When you have talent who can understand shifting audiences, and build a brand that’s stronger than any crisis, and tracks consistently across all mediums and shopping experiences, then you can count on meaningful brand loyalty.
Securing those people is hard to do without expert help. Lime Talent has been filling FMCG businesses with rare and exceptional talent since 2013, and it offers over 60 years of sector experience, among its founders alone. Call 020 7042 3800 and start your search today.