4 Surprises From New Brand Loyalty Data

Brand Keys’ 2011 Customer Loyalty Leaders Index is based on over 500 brands from 79 categories.

Four findings caught my eye.

The strength of the online brands with real differentiation was surprising. Amazon is number one (up from seven last year) and Zappos is number six (unrated last year). Except for J. Crew at 21, the only other retailers to make it into the top 50 were discount chains, starting with Walmart at 13. It looks like the future is now for online retailing. I wrote in a recent HBR blog posting “Will Retailing Ever Be The Same?” that smart phones that allow someone to order online while they are in a store have tipped the retail balance. That observation coupled with the strong execution and points of differentiation in the very best online stores makes the loyalty levels understandable. In my view, we are reaching a real tipping point.

Another surprise was the power of the Hyundai brand, which was at number seven while no other auto brand made the top 50. Only three broke the top 100: Toyota was at 59, and Ford moved up from 323 to 86. Given this category involves emotion, these results are amazing. The quality problems of Toyota for sure are one of the reasons that the brand was tarnished, and I’m sure the same problems plagued others as well. The big story is how the Hyundai brand stood so far above those others. Its achievement was undoubtedly caused by its ability to deliver quality, as documented by awards, its design initiative branded as “Fluidic Sculpture” and its brilliant marketing with the “America’s Best Warranty,” “Hyundai Assurance Program” and “Hyundai Uncensored,” where 50 people drive Hyundais and provide their uncensored comments online.

I was also surprised to see small spirits brands do so well while beer brands were conspicuously absent from the top 50. Patron tequila is ranked number 9, Grey Goose vodka number 15, five more tequila and vodka brands in the top 50 and another five in the next 50. How can the pinnacle of a commodity product gain so much loyalty? The flavored vodkas have given the brands some energy and differentiation, but they are a small part of the sales volume. Incredible. A tribute to the power of self-expressive benefits. You have to hand it to those brand builders.

One more surprise: Dunkin Donuts won the coffee battle at number 12. Second place was McDonald’s at 26, and Starbucks was barely in the top 100. Who has an explanation for that one?

Posted September 20, 2011 / Permalink / Subscribe (e-mail) / Subscribe (RSS)
Tags: brand keys brand loyalty brand power customer loyalty index differentiation

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Thanks for sharing this information. Yes, a lot of surprise. My blog this week is about how store-retailers like Best Buy need to offer better experiences, else the lowest-cost Amazon business model will always win the shopper's purchase. With Amazon's loyalty, unseating them will be very challenging, I use Road Runner Sports as a good example of a company making needed business model changes.

— Added by Kay Plantes on September 21, 2011

..."Brand loyalty has always been primarily driven by emotion," points out Brand Keys founder and President Robert Passikoff...

I think the role of emotion in brand loyalty is partially misinterpreted specially among brand owners.

IMO, "habit" is ahead of "emotion" in building loyalty. being accustomed to a product is more serious and more real than emotions towards it.

Some brands try to grow loyalty via emotional marketing comminication, before making sure that their product/service can match and mingle with people's lifestyle, habits and routines. I believe that you can have more loyals by being "usual" than "different".

And habit can also be responsible for what we talk about as "brand love" (the previous post) i.e. people rather praise what they usually do -the brand they are accustomed to- than suddenly fall in love with a brand.

All in all I loved the topic, the post and the survey. Thanks.

— Added by Mehdi on September 26, 2011

I agree that habit is vastly underrated. In my book Brand Relevance I argue that "my brand is better than your brand" marketing rarely creates sales gain because of habit and you need to innovate to create new "must haves" that define new categories or subcategories in order to change anything. But emotional benefits can make a huge difference for those brands that can generate them. They solidify habits.

— Added by DAvid Aaker on September 28, 2011

[you need to create new "must haves"]

[Emotions solidify habits]

These two can be thought as simple golden rules. Prophetic!

— Added by Mehdi on September 30, 2011