The contribution that the overall perception of value makes to customer engagement, loyalty, and profitability has increased in significance in the price-value formula that consumers apply (even if it's subconsciously) to decide which brands to buy, according to the latest Brand Keys Customer Loyalty Engagement Index (CLEI).
The study's results suggest that shopper consciousness has shifted from a personal responsibility to ferret out the best deals to the brand being expected to take responsibility for providing them.
According to Robert Passikoff, Brand Keys' founder and president, "You only have to look back a few months to see that the convergence of the US economic crisis with the holiday season was evident in stores across the nation. Gone were signs offering 15% off. Instead, banners hung from store awnings advertising discounts of 70%, 80% or even 90%."
But Passikoff warns that the latest CLEI data predicts a shift in the consumer engagement marketplace, if not entirely precipitated by the economy: "We have predicted this for years. This shift represents a move away from consumers thinking about price and toward an expectation of value."
The US brands that received the highest loyalty and engagement ratings in the 2009 index were:
- Airlines: JetBlue/Southwest;
- Automotive: Toyota;
- Banks: Bank of America;
- Car rental: Avis;
- Casual dining: Olive Garden;
- Coffee: Dunkin' Donuts;
- Computers: Apple;
- Credit cards: Discover;
- Fuel retail: BP;
- Luxury hotels: W Hotels;
- Upscale hotels: Embassy Suites;
- Mid-scale hotels: Comfort Inn;
- Economy hotels: Days Inn;
- Fixed phone service: Verizon;
- Wireless phone service: Verizon Wireless;
- Online books & music: Amazon.com;
- Online brokerage: Scottrade.com;
- Online travel sites: Expedia.com;
- Quick-service restaurant: McDonald's;
- Clothing catalogue: J. Crew;
- Clothing retail: J. Crew;
- Discount retail: Wal-Mart;
- Department store: Kohl's;
- Electronics retail: Best Buy;
- Office supply retail: Staples;
- Search engine: Google.
"These winners are the result of consumers having new levels of expectation when it comes to price, and the brand's perception of value. Wise shoppers won't be rushing back to pay full price anytime soon. The most significant shift as a result of the recent discount mania is a neutralising of the impact of price," warned Passikoff. "The buying decision has shifted from price to an even greater emphasis on value."
But, believe it or not, this can actually be good news for brands. Category drivers are important to understanding brand engagement and getting it right when dealing with today's consumer. Properly configured, category drivers can tell marketers far more than who a customer is (the typical demographic and attitudinal point-of-view) - they can actually provide the data that brands really want and need: how consumers will actually behave in the real marketplace.
So, while economic news hasn't been good in recent months, these shifts in consumer attitude are providing an opportunity for brands that pay attention to the customer to offer the differentiation that will tip the scales in their direction. Passikoff concluded: "Value matters more than ever, and for brands that have something real to offer, this may just be the event they have been waiting for."