Why our obsession with creating loyal customers may be a fool’s errand
If we think about it, it’s very rare to buy more than we really need (at least on purpose). Unless we are a collector (or highly paid footballer), we don’t tend to buy more cars than we can drive, nor do we buy more fridges we can fit in our kitchen and we rarely buy more bottles of olive oil than we realistically need for a given time period. Sure, we might sometimes, by mistake, buy the extra packet of rice when we already have one, but in those cases we try to compensate by skipping that item during the next shopping trip. As consumers we generally tend to buy what we need, when we need it.
At the same time we rarely stick to the same brand. If our preferred brand of cheese is not available, or maybe we simply don’t see it on the shelf, we buy another equivalent product. If a brand of premium orange juice is on offer we might try it out as long as we feel it’s safe to do so. In wine, part of the joy of the category is exploring and switching between brands, varietals and regions rather than always sticking to the same product.
Yet, if consumers don’t buy more than they need and naturally swap between brands, it seems strange that marketers spend a lot of their time thinking about fostering loyal customers. Can we make our customers buy us more even if they don’t need to? Can we expect them to stick religiously to our brand? Academic research has been grappling with this issue for many years, and the answer tends to be a fairly consistent “no”. This was the conclusion of the late Andrew Ehrenberg, whose work in the field of consumer behaviour has become the touchpoint for all researchers investigating the area of loyalty.
We defined an experiment in the wine category using measures developed by Ehrenberg’s research:
Share of category requirements (SCR) is the % of a consumer repertoire that a brand fulfils. For example, if the SCR is >50% it means that a brands accounts for more than half an individual purchases, this would indicate high loyalty to that product.
100% loyalty is the % of consumers who only buy your brand.