Every year Cult Collective member, Robert Passikoff, and his firm, Brand Keys, publishes a list of “Loyalty Leaders”, meaning brands whose customers indicate they best meet their expectations and earn their loyalty. Interestingly, this year’s Top 10 is comprised entirely of digital-related offerings:
1. Netflix: video streaming
2. Amazon: tablets
3. Apple: smartphones
4. Apple: tablets
5. Facebook: social networking
6. Google: search engines
7. YouTube: social networking
8. Amazon: online retail
9. WhatsApp: instant messaging
10. Amazon: video streaming
“Loyalty Leaders” are brands whose customers indicate they best meet their expectations and earn their loyalty.
The brands and categories ranking highest on the list excel at creating high levels of consumer engagement. But what makes digital firms seemingly better at engagement and earning our loyalty more than firms in more traditional ‘analog’ categories, like retail, hospitality, or manufacturing? I suggest four reasons:
First is a category advantage tied to usage. The top-ranking firms provide products or services that consumers tend to use on a daily basis. As our familiarity and dependence upon a good or service increase, so does our affinity and loyalty towards it. It’s the same reason why grocery store loyalty programs enjoy higher usage than those of apparel retailers. But interestingly, those other categories we use every day – such as our cars, appliances, homes, watches, toiletries, groceries, etc. – don’t rank as high. Perhaps technology is just easier to fall in love with than toothpaste or soda.
As our familiarity and dependence upon a good or service increase, so does our affinity and loyalty towards it.
The second reason I hypothesise digital-based companies scored so well, is their business models are engineered to provide personalized experiences. The Top 10 offerings are easy to customize, they remember our preferences, and serve up content in the manner we want to consume it. Facebook, Google, Amazon, and Netflix, in particular, go to great lengths to provide helpful recommendations, and make it feel like they really know us. Any brand with a co-branded credit card, loyalty program, or ecommerce engine (hotels, pharmacies and travel sites come to mind) can take a page from this playbook and better leverage their data, creating more relevant and personalized experiences.
Third is likely due to innovation. These loyalty leaders are cutting edge – making up new products and services that didn’t exist a few years, or even months, ago. If the most powerful word in advertising is “Free”, perhaps the most powerful word in brand loyalty advocacy is “New”. Today’s consumer has an insatiable appetite for newness, and the brands that are disrupting categories, investing in product development, and courageously shattering old paradigms seem to be winning our love and respect. When I consider this year’s Gathering winners, I can’t help but see a correlation, since innovators like AirBNB, Car2Go, Vice, Movember, and The Chive are all being honored (and have all helped redefine their industries).
If the most powerful word in advertising is “Free”, perhaps the most powerful word in brand loyalty advocacy is “New”.
Lastly, none of the Top 10 loyalty leaders employ traditional marketing or advertising the way their mediocre peers do. Rather, they understand the best marketing is in building something amazing. As Robert Stephens, founder of Geek Squad once famously said, “Advertising is a tax companies pay for being unremarkable”. The Top 10 brands make sure that at least part of their remarkability is their usability. They are intuitive, and in some cases, enjoyable, to interact with. How many companies do you associate with that are difficult, inconvenient, or simply no fun to do business with? Consumers have too many choices now to put up with companies providing the bare minimum in regards to service delivery or product experience. And the marketplace is losing its appetite for promotional campaigns that claim offerings that are great, but in reality, are just average.
Almost every company has room for improvement by shifting dollars out of media budgets and applying them to improving their brand’s overall value proposition.