The Web Kills Brand Loyalty. But Product Innovation Restores It.

pill brand loyalty

How much of brand loyalty comes from the fact that a brand’s customers just don’t have comparable information about competing offers? In other words, how much derives from information asymmetry?  I can’t give you a quantitative answer, but in the days before the web, I’d bet it was significant.  Here’s an example.

I love to take pictures (I’m not very good at, but I still love it).  I’ve been shooting Canon since I was 14 years old. Part of the loyalty derives from a good brand experience.  Part from the fact that I’ve built up a stable of expensive Canon accessories.  But part also comes from the fact that it’s hard to really know how cameras compare and so I stick with what I know works for me.  Information asymmetry.

But then along comes the web and sites like smartsnap.  In a click, I can compare Canon’s vaunted 7D with a less expensive Nikon D7000.  Ouch.

The humbling result is backed up by loads of well-presented specifications and scientific image quality test results.  I can quickly click to blogs, user forums and other testing sites that back up the results.  My loyalty is shaken.  I am seriously considering a defection to Nikon.

Another example is airlines.  For years, people stuck with one airline because of rewards programs, familiarity and the difficulty of shopping.  But sites like Hipmunk boil airlines down into commoditized bars on a graph.

Yes, I can still choose based on where I have my miles, but given information that lets me make an informed choice that fits best with my travel needs, I’d feel like a dope doing so.

The good news, though, is that while the web is killing off brand loyalty left and right, you can still fight back.  In this day and age when every aspect of your product is revealed online and armies of users are discussing it on Facebook, the key to maintaining loyalty is to deliver awesome “whole product” experiences (ironically, this often means including the web in the experience).  From shopping, to buying, to using, to servicing, to disposing the product, an experience must be consistently great throughout.  There’s simply no substitute.

Let’s return to the airline industry.  When I see the hipmunk output above, I jump to the blue bars:  JetBlue.  In my opinion, JetBlue provides a cohesive and consistently excellent (by relative standards) experience from ticket purchase through the flight and post-trip customer service.  I fly them whenever I can.  JetBlue has a much less generous frequent flyer mile program than other airlines, but they can afford to do that because people seek out JetBlue’s product experience anyway.  Isn’t that a better way to achieve loyalty?  The same is true for cameras, appliances or any other business.

Building whole product experience like this isn’t easy.  You need deep, insightful customer research and a creative, cross-functional approach to ideation and product realization.  But as companies like JetBlue show, it can be done.

Brand loyalty is dead!  Long live brand loyalty!

Dan Ostrower

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Dan Ostrower

CEO