How to compete in an era of low brand loyalty
It should come as no surprise that brand loyalty is low. According to our research, Aussie consumers today are only loyal to between one to four brands.
They’re also extremely price sensitive, with price being the number one influence on purchasing decisions. Two in five on average across 10 different categories would switch brands if the price of a product they regularly buy increases.
In an era of low wage growth and increased online shopping, and with the arrival of more overseas retailers including Amazon into Australia – price sensitivity and the constant search for the best deal will accelerate.
However, this doesn’t need to mean doom-and-gloom for your brand. Here are three ways marketers can keep customers coming back in an era of low brand loyalty:
1. Keep a pulse on what your competitors are doing
Savvy brands keep a close eye on what their competitors are doing, how they’re promoting their products, the sales and promotions they have on at specific times of the year and how their own product sales are affected by those promotions.
From there, marketers can decide how they can compete on price, and then promote their brand through the channels consumers are using to research and discover products and sales. Marketers should look to bolster their efforts by incorporating digital platforms like Lasoo and their own websites to communicate sales and promotions online too.
2. Let people try before they buy
Although it may not be a viable strategy for all brands, sampling can be incredibly effective for those with larger marketing budgets to launch or promote a product.
By implementing a sampling campaign, marketers can help consumers leapfrog the awareness and evaluation stage. This brings brands one step closer to conversion, especially when discounts or incentives are offered with first purchase.
Marketers should also use sampling campaigns to discover insights about their customers and engage them more deeply in the brand or product by driving customers online through QR codes.
The landing page should include a call to action asking customers for feedback on the sample via SMS, email or an online survey.
3. Keep your brand top of mind through regular incentives
The flagship sales that were once a key part of a brand’s marketing strategy – the annual Boxing Day sale or end of financial year sale – no longer deliver the long-term impact they once did.
Instead, brands should strategically align promotions at key regular intervals, when their target customers are most likely to shop.
By utilising a loyalty program to communicate promotions and incentivise subscribers, marketers can keep the brand front-of-mind with consumers and boost sales at strategic points throughout the year.
Clever marketers are making an effort to evolve traditional loyalty programs to engage consumers in innovative ways and drive an emotional response.
For instance, youth retailer Culture Kings partners with well-known ambassadors and invites loyalty members to special events via social media, while Qantas and Virgin Australia are creating a more all-encompassing loyalty program by partnering with third-party brands, enabling access to further discounts and promotions.
Dave Webster is general manager of marketing solutions for Salmat.