Loyalty Leaders 2021: Measuring Consumer Expectations Is All That Matters

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By: Wise Marketer Staff |

Posted on September 22, 2021

The 2021 Brand Keys Loyalty Leaders report was released this week. This year’s survey, a cross-category examination of brand loyalty conducted by the New York-based brand loyalty and customer engagement research consultancy, included 1,260 brands in 112 categories. The analysis was conducted during August and September 2021 and included 53,222 assessments (M/F, 16 to 65 YOA, recruited from 9 US Census Regions). Respondents self-selected categories in which they are consumers and then assessed brands for which they were customers.

The report is power packed with insights about how consumers are evaluating brands in a post-pandemic world. We wanted to get additional insights and connected with Robert Passikoff, CEO Brand Keys, to get a look behind the numbers. This Q&A with Robert is a quick but potent read. Enjoy

Wise Marketer (WM): The report showed that consumers are desperate for a return to normalcy and are seeking solace in established brands. McKinsey and others have reported that consumers experimented with a record number of new brands and shopped in new channels during the pandemic. How do you interpret these two findings?

Robert Passikoff (Passikoff): McKinsey said a third of customers they interviewed tried new brands during the pandemic. Does that surprise you? You couldn’t get Charmin, so you bought another toilet paper! Does that dumbfound you? Nah, me neither. They didn’t point out there is (or should be) a distinction between outright need and brand loyalty, just that consumers bought another brand. From that McKinsey decided QED that brand loyalty doesn’t exist.

Three percent (3%) of that same group apparently also said the new brands would have standing in future purchase decisions. Well, asked and answered. Except as far back as 1990 researchers knew “purchase intent” was notoriously over-stated in survey responses. Extreme need and pandemics notwithstanding, what McKinsey proved was the efficacy of mid-1980 satisfaction and ISO-9000 total-quality movements, ultimately made primacy-of-product the rule rather than the exception. So, there was pretty much no downside to buying off-brand toilet paper when, say, Charmin wasn’t available, until it was, and consumers went back to buying it and not the “new brands.” So much for having standing in the purchase decision.

WM: We recently heard from Acxiom during the CRMC conference in Chicago that "there will not be a return to normal". Acxiom commented that the pandemic "packed 10 years of digital transformation change into 10 months". OK, that might be over the top, but brands did make big strides in their e-commerce efforts. Given the research in your report showed a desire to return to normal, how will this hope be resolved with the reality among most consumers that times, they are a changing?

Passikoff: Times are always changing. I’m not sure what Acxiom was referring to when they said “normal.” If they are talking about how people are becoming more digital, well, OK. But that’s been on the increase for quite some time. And people are only consumers part of the time. What digital transformation has — and will continue to affect — are customer expectations, the bulwark of loyalty. Those increase at the speed of the consumers’ emotions, and much faster than brands can keep up.

WM: Your report had a statement that jumped off the page for us: "Brands can act as surrogates for emotional values absent from consumers lives. But brands with high levels of customer loyalty can provide solace too and are six times more likely to fulfill that role in uncertain circumstances, including lockdowns, product shortages, and supply chain SNAFUs." Can you expand on that comment and talk about the reasons why some of the brands that rose to the top of the survey did so?

Passikoff: For brands with high degrees of customer loyalty, which emotionally engage the consumer, AND which better meet their ever-growing exceptions, the loyalty “Rule of Six” kicks in. High customer loyalty levels engenders both psychological/emotional and behavioral actions on the part of the consumer. They’re six times more likely to buy, but again, invest in, and listen to this, give the brand the benefit of the doubt in those uncertain circumstances.

But it’s the emotional connection that’s most important. As I mentioned earlier, satisfaction is price-of-entry to any category. But if a brand can make the emotional connection, they’re going to be the loyalty and market share winner. Look at Amazon. There are lots of online retailers, but they make a connection fulfilling consumers’ needs for "immediate gratification." Apple did via outreach and “human connection.” Netflix did it via “diversion,” and Domino’s was pure “comfort” (food). That’s not to say other brands can’t perform rationally based on primacy-of-product. It’s just that the top brands did it better than anyone else!

WM: Can you share any comments about the new brands on the list? From the report, “Brands new to the Loyalty Leaders List this year include: TikTok (#21), Apple TV (#26), Levi Strauss (#46), Red Bull (#61), Walmart.com (#64), Crest (#65), Svedka (#86) and Lululemon (#90).”

Passikoff: TikTok is a good example of what I think Acxiom might have been referring to. But it’s also a good example of a desire for connection. Social networking has shifted quite a bit over the past two years. Apple TV has been around for a bit now and finally got it right as regards to programming that responds to the consumer’s need for “diversion.” Meeting expectations is mostly emotional, but not entirely. Quality matters and you can’t get people engaged with weak storytelling. Red Bull, well, “gives you wings” and was the right product for a time when folks need lifting up. Levi Strauss and Lululemon were brands that are 21st century illustrations of the emotional need for ornamentation. Walmart made the list because people need stuff, and they were there when others weren’t.

WM: Do you have any more comments to add about the brands that were the biggest winners or losers? Is there anything that you gleaned from the research that might add some context for these rankings?

Passikoff: I can make the emotional connections to the brands that were the biggest winners. Pinterest had to do with outreach and connection. Lyft was there when people needed physical connection and Dick’s Sporting Goods provided the necessaries for diversion at a time when a lot of activities were barred — physically and emotionally. The combination of the economic crisis and COVID obliterated certain categories, which is why retailers like Zara and New Balance and Zappos suffered the way they did, particularly from a loyalty perspective. So too for insurance companies.

WM: We have been pondering this great comment from the report as well: "Brands that connect emotionally with consumers and can meet consumers’ mostly-emotional expectations, always do better during crises — six times better." What does that tell you about how brands can position themselves for the future? What changes would you consider making if you were in the CMO seat at a major brand?

Passikoff: Real loyalty assessments measure the emotional engagement between the consumer and brand versus the consumer’s perception of their category Ideal. Emotional engagement is the degree to which a brand can meet the expectations consumers hold for their category Ideal. Brands that can do that always see “brand loyalty” and the attendant sales and profits that come with it. If I were a CMO at a major brand, I’d be demanding that we knew exactly what consumers’ expectations were for our category. And since those are mostly emotional, I’d make sure we had some mechanism for precisely measuring that! Otherwise, you end up with McKinsey-like answers.