The Limits Of Brand Loyalty In A Down Economy.

As I've mentioned before, brands that invest in creating loyalty amongst their best customers in good times reap the rewards when things go south. That doesn't mean, of course, that you can simply go on doing what you've always done and expect your customers to return like good little sheep.

The simple truth is, at some point customers feeling the pinch will eventually shop around. They'll trade down to less expensive products, and here's the thing... if that cheaper product gets the job done same as that more familiar, more expensive brand, their loyalty can shift away for good.

The good folks at Marketplace explored this recently in a piece called Will Brand Loyalty Return In Good Times, and it's well worth checking out.

Comments

[jeff]

It all boils down selling something. Which product will get in the consumers basket. This goes for service companies too.

I would think in this economy it would be better to be positioned as #2 and marketing harder to decrease that gap then it would be staying #1 and convincing consumers that they are making the right choice.

Dollarization is key to whatever position you are in during leaner times because you are needing to fulfull 2 requirements.

1. Does the consumer even need your product/service at this time. (needs vs. emotions). Have you dollarized this need.

2. If they determine it is a need, why your product versus any of the others. Which brand can fulfill the need scaled to the dollarized value the consumer has placed on it.

A couple of ideas I've been working with anyways.