Is Brand Loyalty Dead?

UPDATED: March 7, 2011
PUBLISHED: March 7, 2011

Robert Bloom built his career by developing successful sales and marketing solutions for some of the world’s biggest brands. As the CEO of Publicis Worldwide, he helped create and implement growth strategies for companies such as BMW, L’Oréal, Nestlé and TGI Friday’s. In addition to consulting for businesses of all sizes, he directed the launch of brands that went on to become household names—Southwest Airlines, T-Mobile USA and Theraflu.

“When I retired from being CEO of Publicis, I had no intention of writing a book,” Bloom says. But as a student of trends and a business consultant, he noticed two things: Technology had changed the way businesses and customers interacted, and existing books didn’t offer satisfactory strategies for dealing with newly empowered buyers. Bloom set out to define the problems facing business leaders and to provide solutions. “I wanted to simplify the complex and to make the answers universal so that any business leader can apply them to his business immediately,” he says.

In his first book, The Inside Advantage: The Strategy that Unlocks the Hidden Growth in Your Business, Bloom explains that it’s necessary for a company to identify its core customer and assets and then create a plan for selling—connecting the customer to the company’s offering. His second book, The New Experts: Win Today’s Newly Empowered Customers at Their 4 Decisive Moments (Sales Marketing)
, reveals strategies for selling to today’s super-savvy customers. In this interview, Bloom shares insights on how to connect with buyers and sell in a world where brand loyalty is nearly a thing of the past.

SUCCESS: How has customer loyalty to a particular brand changed?

Robert Bloom: If customer loyalty isn’t dead, at the very least it is declining. And it has been declining for some time. In the 1980s, four out of five car buyers were loyal to one brand. But in 2009, only one out of five customers stayed loyal to a brand.

Customers have changed. Technology and the Internet have given buyers unlimited information, and knowledge is power. At one time, you had to go to the dealership and get the brochure. You were forced to rely on the dealer for information and were limited to what he offered you.

The buyer is in charge of the process now, and there’s no benefit for him to be loyal. They’re looking for a better product or service at a more advantageous price.

Buyers also have unlimited choice. That’s hugely powerful. If you don’t have what they want, they can go next door and get it. That shift in power is what killed (or is killing) the idea of loyalty.

What can companies do to revive loyalty?

RB: There is no way to revive loyalty. But that doesn’t mean we can’t create preference—and that is very different than loyalty. Preference says, “I prefer you over three competitors.”

It takes work to create preference. Before the markets crashed in the last few years, sellers sold everything they put out there. As a result, they became complacent. Some sellers are still selling the same way they sold when they were in control. The sellers don’t know how much trouble they’re in. Their customer has radically changed, and the sellers will go out of business if they don’t change.

What can sellers do to create customer preference?

RB: There is a new coffee shop that opened near my home in New York. They have great coffee. (You have to be able to offer a good product or service; that’s the price of entry.) With every coffee you buy, you get a tiny loaf of cake that’s wrapped in a paper with their logo on it. People clamor for it. It’s a way of creating preference and of reminding people to go back. They also welcome people as they come into the shop. You can create preference by welcoming someone.

Here’s another example. When I was a kid, we’d take long drives. My father used to say that Mobil stations had cleaner restrooms. So if we were driving along and we weren’t dying for gas, he would drive a little farther so we could go to a Mobil station. Cleaner restrooms were the reason my father preferred Mobil stations.

You can create preference by helping people make better decisions. Say someone wants to buy a bouquet of flowers for Mother’s Day. The florist can create preference by helping the customer choose flowers by asking questions like, Where do you think she’ll put them? or What color does she prefer? Or by telling the customer which flowers will stay fresher longer. That customer may not be loyal to that particular florist, but the florist creates preference by helping him.

You create preference by giving your customers small—or big— benefits. You don’t have to give away the store. There are a lot of ways to create top-of-mind awareness and preference.

What do you mean when you say sellers must think like buyers?

RB: You have to get in the head of your buyer. You have to know what your customer’s needs, fears and wants are. You have to listen to the customer.

Today’s customers come ready to buy; they didn’t come ready to buy 10 years ago because they didn’t have the information. The seller had to explain how things worked. If a customer goes into a store today and the salesperson starts telling them the features of a product they’ve already researched and studied on the Internet, they’re likely to be offended. Today’s buyers have already done their homework.

Instead, you have to make a friend. If the customer doesn’t like you, chances are he’s not going to buy from you. Get him to trust and like you. Ask questions to discover his needs. If you ask the right questions and listen to your customer, you’ll get in his brain. Get inside his heart and understand what’s really working there. Don’t start selling him; start listening to him.

What is the inside advantage?

RB: Every business has something inside it—a strategic asset. It might be hidden or asleep, but it’s something you can use to grow your business. You shouldn’t try to copy someone else; you should find your uncommon offering, your inside advantage.

Does that mean a business must be unique to set itself apart from the competition?

RB: No, you’re looking for your uncommon offering; looking for unique is a waste of time. What you want is something that is not common. And then you have to find a way to become well known by your core customer for your uncommon offering.

Think about it this way: If all your competitors are standing together on one strong table, you want to be off to the side standing on a stool all alone, telling your core customer, “Come to me because of (your uncommon offering).”

How does that compare to branding?

RB: I don’t believe in branding today. Brands are ubiquitous. And customers don’t care about a brand; they care about what they need. It’s much better to be known for your uncommon offering than it is to be known for your brand.

The question is then, how do you do that? You want to be well known for something, and it doesn’t require a lot of money. What do you put on the bottom of your email? What’s on your business card? What’s on your packaging? What’s on your invoice? Start right there; tell your customers what you do better than anyone else.