Does everyone want to buy the cheapest products available in the marketplace today? Are generic and store brands in; and name brands out? This week we will delve into the value of brand loyalty, and why I believe it still matters when it comes to making purchasing decisions.
If you polled the average consumer, you may get the impression that brand name products and services are not very important today. This may be true if you are buying paper towels or mouthwash, which are not critical purchases. However when purchasing specific products, most individual do have a sense of loyalty for brands that work well for them over time. Some examples might be buying an automobile; a 60 inch TV; or a desktop or laptop. The more we use an item and depend on it's reliability, the more we tend to care about brand names.
Speaking for myself, I have a great deal of brand loyalty for many products and companies that have earned my respect and that of my family members. For instance over the last decade, Lexus and Toyota have slowly earned the business and loyalty of my entire family. They continue to produce quality products that prove to be reliable year after year. As long as this trend continues for Toyota, and they do not let any of us down, it will be tough for the competition to get us to switch. I believe that their quality and attention to detail, had something to do with Toyota becoming the second largest seller of automobiles in the US this past July, moving ahead of Ford who held that second spot for decades? And FYI, they aren't selling more vehicles because they are cheap, since they enjoyed a 39.2% increase in net profits on a 7.3% increase in sales for their last quarter ending June 30th. In automobile sales, I think it's safe to say that brand loyalty can really matter.
When it comes to TV's which are ever more complex these days, my family's households which were once filled with Sony's are now full of Toshiba's. Again quality products; reliable service life; and we have yet to be let down by Toshiba. With PC desktops and laptops, my offices were filled with IBM's in the 80's; Gateway's in the early and mid 90's; Dell's in the late 90's early 2000's; and now we buy all Toshiba laptops. Toshiba is a peanut in the laptop business, however they are hungry and innovative and provide the same ingredients just described: quality products; reliable service life; and we have yet to be let down.
Keep in mind that manufacturers are not the only enterprises with brand loyalty that's extremely valuable. Brand Loyalty has no limits. It can range from a cup of coffee from Starbucks to a retailer such as Costco; a food product such as Sunkist pistachio nuts to a local steak sandwich from Pat's Steaks of Philadelphia; a surgeon's reputation for excellence to a Broadway Play that runs for years. Brand Loyalty continues growing more powerful every single year.
One of my favorite examples of a company that has earned my Brand Loyalty is Costco. Nothing fancy about shopping at Costco. It's a warehouse club that you have to PAY an annual fee to shop at. They stock a limited number of products, in over-sized packages. However what they do sell has always proven to be fresh and of high quality; and it's nearly impossible to find the products they sell at a better price at any other store or on the internet. They have the friendliest staff of any big company retailer; and a return privilege second to none. They have created their own brand name products such as Kirkland, which meets or exceeds national brand name consumables at fantastic prices. I never to wait in line more than 5 minutes to checkout, and sincerely believe that they make every imaginable effort to make their customers "want to buy there." Because of their excellent execution of the basics, and attention to details, their profits were up 14% in the last quarter on record sales of 13.27 billion. That's a lot of merchandise sold in a quarter to members who have to pay to shop there.
Every business, regardless if it's a one person business or a multi national corporation is adding or subtracting from their brand value every single day. Execute well and do what it takes to make your customers want to purchase your products or services, and you will build your business around loyal clients who want to part with their hard earned money with your enterprise. Take your clients for granted and you will watch them disappear quickly. It can take a hundred years to build a truly successful brand. It can take less than a year to destroy it.
All entrepreneurs and enterprises of all sizes, should strive to build their businesses around loyal clients. Those who build loyalty will be the most profitable and sustainable businesses on the planet. However, loyalty is not to be taken for granted. Just look how my loyalty changed for products and services like computers over the last two decades – and you will see that loyalty does not mean FOREVER! Loyalty for products and services must be earned each and every day by "wowing" clients constantly. Loyal customers are the most valuable asset a business can obtain. Work on your BRAND daily and you will enjoy the fruits of your labor!