Itamar Simonson and Emanuel Rosen have me thinking differently about the components of brand value and how “consumer loyalty” is derived. I thank them for that – in over 20 years of working and thinking in this space I rarely, rarely say that -original thought is so hard to come by, especially in a space where everyone is kind of an expert, because everyone is kind of a consumer.
Yes, I understand the role of brand value to brands – it creates consumer demand for their product which increases leverage with distributors and retailers which, in turn, drives both sales and profitability. And I have been aware of the trust factor for the consumer, you want to trust that the values you ascribe to a brand exist whenever and wherever that brand appears (consider Target’s brand characteristic of affordable style, WalMart’s brand of everyday low price). Having spent some time in Bulgaria, in 1998, just as it was coming out of decades of communism and finding its way into free market marketing, I also appreciate the role that having different “brand values” plays in a society . When you don’t have consumer choice, you don’t have brand value – and so, to me, being able to create choice – with brands that have different values – as a means of consumer self-expression and empowerment – is also an angle I understand.
But there is something about the way this article breaks it down that is intriguing to me. It will take a while for the seeds they planted in my brain to germinate into something really useful, but here is what they have me ruminating about:
What is the Role of Brand Value in Consumer Loyalty? (or I would say creating “consumer demand”)
Simonson and Rosen essentially say the value is “quick reference”. Consumers either don’t have to do the research, or don’t have to do as much research – before buying – because they trust the brand, or more specifically what the brand means. They hypothesize that in an age of “almost” perfect information, – the research that used to be able to be “assumed” by certain brand value attributes, is now readily and easily available online. They conclude that, in this case, it is the “absolute” value (not the relative “by association” brand value) of the product that is most important.
As I try to break this down, I think that is probably true in some instances – particularly where the fact is easily verified or quantified. Examples of this would include quality, safety or some other quantifiable standard or feature (like gluten-free, or organic ingredients). But even then, the value is relative – the consumer now trusts the online recommendations more than the “brand value”?
But if the information the consumer needs to know in order to buy is more subjective or emotional, or specifically desired to amplify an actual or aspirational characteristic of themselves (or distract from an actual or feared less attractive characteristic), it would be impossible for “absolute value” to be able to be established as apart or separate from brand value. For example – “if know if I wear X brand clothes, I’ll be cool” or “driving a Prius tells people that I am environmentally responsible” or “wearing Spanx is okay, but wearing a girdle makes me feel like a grandma”. While there may be some factual basis for these emotional brand values, they are also still relative….isn’t that why celebrity and sports star endorsements are so popular? How many products and personal brands did Oprah create with her “Favorite Things” and her “Book Club”?
At the end of the day, all value is relative – even in a world of “perfect” information…because we are a society of continuously interrelating human beings…and so no, I don’t think “Tech” is eroding consumer loyalty – or reducing the role or importance of “brand value” -but I’m willing to consider the possibility. It’s just that, like many things, technology and greater accessibility to information accelerates the cycle and the pace of change. A consumer brand can be created and gain significant value very quickly, thanks to technology. And those same brands, along with long established ones, can be eroded quickly as well, thanks to technology.
But the basics are still the same, brand value is important – because consumers aren’t “always” or “absolutely” anything… but right.
Is Tech Eroding Consumer Loyalty? (via Strategy&, fka Booz & Co.)
Susan O’Neal Gear has over 20 years of experience at the intersection of consumers, marketing and technology. Passionate about all aspects of a consumer’s relationship with brands and retailers, we’re spending the next year looking for new, groundbreaking thought leadership – if not disruptive solutions – with the potential to redefine the parameters of consumer loyalty. If you also want to see some game changing happen -then follow Upstream Insight, contribute your voice, share this post…do something!