Newcomers threatening established brand loyalty

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By: Wise Marketer Staff |

Posted on November 8, 2004

Wiser consumers and the difficulty brands face in meaningfully differentiating themselves have contributed to significant shifts in brand loyalty, according to loyalty research consultancy Brand Keys.

Research from New York-based brand and customer loyalty research consultancy, Brand Keys, reveals that while Google (ranked first), Avis (second), and Verizon Long Distance (third) maintained their leadership positions, others, including Starbucks, Adidas, and Exxon experienced significant drops. According to Brand Keys president, Robert Passikoff, "Wiser consumers, and the difficulty brands face in differentiating themselves in ways that are meaningful to consumers, contributed to these rankings. The good news is that the loyalty measures are leading-indicators so brands can examine what they've been doing wrong and consider what they might do. The bad news is that these metrics correlate very highly with profitability."

New brands
This year, 23 new brands (nearly 12% of the total) entered the list. This serves as a warning to established brands to consolidate their customer bases or risk seeing newer, trendier brands - who better meet or exceed market expectations - appropriate their customers. Rather spectacularly, the Sony Ericsson Mobile Phone partnership raised its brand from 93rd last year to 22nd this year.

This suggests that companies can no longer rely on strong sales in the past or even currently, or how established they are as a "well-known" brand, or how much they are spending on advertising campaigns. "It's getting tougher and tougher," says Passikoff. "But the brands that understand the function of loyalty as it directly applies to optimizing a brand's strategy and media spending will come out ahead of their competitors."

The complete ranking of more than two hundred brands and the research methodology can be seen here.

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