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Loyalty

W e all know the value of a loyal customer. We also know the 80/20 rule — marketers invest heavily in their most-loyal customers, who in turn drive

up to 80 percent of their brand’s value.

As a recent Conference Board survey of top CEOs confirms, driving brand loyalty has never been more important. According to the survey, CEOs see brand loyalty ranking first among management concerns. Why? Because, as Frederick F. Reichheld pointed out in The Loyalty Effect, increasing the size of a typical brand’s top-tier customer base by just five percent can drive a 25 percent to 100 percent increase in profit. Increasing a brand’s base of loyal consumers requires brand commitment — the engaged, active selection and re-selection of your brand by consumers. Committed consumers will go out of their way to find your brand. They are less price-sensitive when given the choice between your brand and others. Committed consumers are more likely to try new product extensions and require less investment to induce repurchase, allowing you to focus on acquiring new users. As brand loyalists, they will also advocate and evangelize your brand to others. But how do we create that loyalty? From what pool does brand loyalty spring eternal? Is there a formula to follow in creating the perfect mix of price, product, place, and promotion? What makes someone stay loyal, despite aggressive competitive activity? Being loyal to a certain brand — belonging to that brand family — is grounded in Maslow’s hierarchy. As human beings, we have an innate need to belong and it is emotional connections that fuel that sense of belonging.

The 2011 Brand Keys Loyalty Leaders study confirmed the importance of emotion to foster brand loyalty. According to the study’s director, Robert Passikoff, “loyalty is absolutely driven by emotion, and this year consumers are absolutely looking for emotional connections — more than ever before.”

Moreover, according to a recent Boston Consulting Group study over a 10-year period, brands that evoked

a stronger emotional response drove greater loyalty,

greater volume and higher prices (20 percent to 200

percent higher than less-emotive brands). But there are significant barriers to making

emotional connections between brands and consumers. Marketing strategist Jack Trout pointed out in Differentiate or Die that our minds can’t cope with the clutter; we have a pre-wired physiological limitation to processing stimuli, especially in a world with more than a million new web pages joining the internet every day. Ours is

a world where most of us have seen more than

140,000 commercials by the time we’re 18 years old.

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Sir Richard Branson is among the most prominent proponents of the maxim that emotional connections drive brand commitment. According to

Sir Richard, “feelings — and feelings alone — account for the success of the Virgin brand in all of its myriad

forms

something bigger than themselves.” Sir Richard is also adept at breaking through the clutter. I had the pleasure of closing Times Square and dropping him off the side of the Bertelsmann building, riding a giant mobile phone, dressed in a nude muscle suit with a phone strategically covering his nether region — all done to launch Virgin Mobile in the United States. His antics have also included driving a tank down

everyone likes to have fun and feel part of

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Emotional connections stir brand passions and seal consumer loyalties.

Fifth Avenue, driving an amphibious car across the English Channel, breaking the hot-air ballooning speed record crossing the Atlantic, his famous space rockets and other adventures. Each of these activities builds personality into the Virgin brand, and with it, emotional connections are created.

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Red Bull is another brand that cuts through the clutter and creates an emotional bond. Red Bull’s brand idea is all about energy, action and velocity and it drives this positioning across a wide range of experiential touchpoints designed to impact various segments of its target mix. The consistent element across all of Red Bull’s activations is an unbridled passion for speed, energy, and accomplishment. Red Bull runs events across the globe and enjoys a great deal of synergy as video and coverage are captured and shared globally. One key measure of Red Bull’s community-building prowess: more than 10 million Facebook friends as of this writing, all checking in on Red Bull on a regular basis to see and experience the brand’s live events around the world. Activations are too numerous to list, but include:

Sampling and nightlife programs targeting young adults and key influencers in the worlds of music and entertainment.

A wide range of action and adventure sports events and sponsorships (auto racing, motor cross, cycling, snowboarding, skateboarding, freestyle skiing, BMX and mountain biking, surfing, cliff diving, wakeboarding, speed/trick skateboarding, skydiving, ultra running, extreme kayaking).

Proprietary s ponsorships: Red Bull owns a half- dozen professional soccer teams around the world and creates and tours proprietary events like the Crashed Ice, Air Race World Championships, King of the Rock Street Ball.

Participatory events: Open to everyone, these include soapbox races, the famous Flugtag flying machine contests, Candola (a uniquely Canadian gondola building and race contest), and others.

J o H n n y

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J o u r n E y

Johnnie Walker’s “Journey of Taste” is another

r n E y Johnnie Walker’s “Journey of Taste” is another example of a long-running campaign

example of a long-running campaign that cuts through clutter with an emotional punch. This

program is a combination of relationship marketing and experiential that together develops target consumers into Johnnie Walker loyalists and ultimately brand “passionists.” Target’s consumers are invited to private events and each may bring three friends (which greatly increases an attendee’s likelihood of attending).

A short cocktail reception is followed by a multi-

sensory, 90-minute experience where they taste, smell, and visually study the various marks of

Johnnie Walker scotch. The room is surrounded by video telling a story of each Johnnie Walker mark and the attendees pass around examples of the oak casts, charcoal, and peet that is used to make the scotch (furthering the sensory experience). Participants are invited to follow-up events, each inviting three more friends, and the cycle of brand immersion continues. The post-event research and follow-up allows the brand to calculate the long-term lifetime value of consumers who have gone through the Johnnie Walker Journey. The program has been run continually for over 10 years, and it continues

to establish the emotional connections necessary to

build brand loyalty. Sir Richard Branson, Red Bull and Johnnie

Walker are creating loyalty by personifying their brands and breaking through the clutter, delivering meaningful brand messages that connect emotionally with their consumers. Their activities are designed

to promote creating and sharing the fun with others,

and provide value and interest to consumers that motivate their participation and sense of belonging. They reinforce messages through multiple aspects of the marketing mix, and, most important, they gather learning through post-event research so they can refine and augment their loyalty-building successes. n

BRAD BRYEN is executive director, experiential marketing, G2 USA, with expertise in integrating experiential, retail

BRAD BRYEN is executive director, experiential marketing, G2 USA, with expertise in integrating experiential, retail and shopper marketing, promotion, interactive and customer relationship management. He may be reached at bbryen@g2.com.

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