Brand loyalty

Every company tries to get as many loyal customers as posible, as loyalty assures purchases. But in the current world loyalty seems to be dramatically dropping. There are various reasons that explain this decline:

• Consumers don't compare companies to where that same company was a year ago, but they compare it to the best-in-the-class, meaning the best brand of that kind of product/service.
• Shortcuts, such as loyalty cards, to gain loyalty do not work. Companies thought that loyalty to brands can be bough but it must be earned. 
• We live in a digital world, and that can be a double-edged sword. It is true that companies can reach much more people, but much more people can reach the companies and their flaws as they are normally posted on the internet for everyone to see. All that easy-reaching informations makes customers able to compare between products and then choose the best.

The 80/20 rule, which said that the 20% of the customers generated the 80% of the turnover, is nor longer valid, and it is changing into a 60/40 or even a 50/50. This means that the loyal and disloyal customers will be creating the exact same amount of benefits. 

Digitalization seems to be the key of the whole declining process. So the question is: is it worth to invest in loyalty programs ?

Steven Van Belleghem gives a solution that encourages brands to go back to basics, a solution that aparently is not going to be achieved by marketing as it lies in a deeper level. Read the link below to know more about this solution.

Source: Why customer loyalty is declining and what companies can do about it.