Disloyalty is the New Black

Disloyalty is the New Black

Looking to Land in Consumer Baskets? Don’t Bank on Your Brand Power

If you’re one of those marketers who’s always relied on the 80/20 rule as a benchmark for sales success, you might want to adjust your strategy. That’s because today, more people than ever are interested in trying something they’ve never tried before.

The implications here are significant. As consumers become more brand disloyal, marketers can no longer expect 20% of their portfolio to drive 80% of their sales.

The data behind disloyalty is staggering: Only 8% of global consumers are loyal to the brands and products they’ve always bought.

Closer to home, the findings aren’t much better. Only 9% of U.S. consumers say they’re brand loyal, and consumers in Canada are on par with the global average of 8%. Compared with the global average, however, Americans are the opposite of adventurous: In fact, only 36% of Americans say they love trying new brands and products, a full 8 percentage points lower than the global average of 42%.

In looking at consumer sentiment—in addition to actual retail data—it’s clear that loyalty is no longer a bankable asset. The ramifications, however, are clear. The race among brands and retailers to remain relevant has flooded the market—and that will continue.

Simply adding more choices to the equation is not the answer. In fact, it’s the opposite of an answer. That’s because 80% of new consumer packaged goods (CPG) products are not incremental to either the brand or the category. That means they’re being developed for nothing. Simply put, creating more products doesn’t automatically grow sales. In fact, generating new products no one wants can actually reduce total brand sales: 25% of new products actually reduce the total sales of a brand franchise.

It’s Not Just About the Benjamins

We’d all be foolish to think price wasn’t a consideration when it comes to what influences what we buy. That said, however, price is a driver of choice. But if we look at success drivers, the influencers don’t trend.

It’s important to note that “better value for money” is the No. 1 influencer globally. It’s also the strongest influencer across four of the globe’s five primary regions. In Asia-Pacific, consumers rank “enhanced or superior quality or function” above value for their money. Globally, enhanced or superior quality or function ranks No. 2 (of the five top influencers), which reinforces the fact that cost isn’t always the best motivational lever to pull.

Firm Loyalists Won’t Save Your Brand

With disloyalty at an all-time high, it would be easy at this point to equate scale with a death blow. Yes, small, challenger brands benefit from nimble processes, and many were born online. There’s no rule, however, that says large corporations can’t embrace the change and adopt similar tactics. We know that just under 9% of consumers in North America are firm loyalists.

Instead of focusing on a very small group of loyalists—one that is nowhere near substantial enough to support a brand—focus on retention, extension and new products that appeal to a much larger audience. In addition to appealing to consumers seeking the new and different, you’ll likely tap into the 40% of Americans who are “lazy” loyalists along the way, simply because they’re only loyal because they haven’t been properly motivated to make a change.