In a push marketplace, companies drove repeat purchasing with price promotions, rebates and reward programs, all of which came at the expense of longer-term brand equity.
Three things happened: 1) brand value was defined on rational terms relative to price or reward, rather than a deeper, more emotional connection between the brand and the customer; 2) discount and reward programs had to be sustained or customers would leave in search of more desirable perks from competitive companies, thus eroding profit margin and playing into the commodity trap; and 3) by design, this approach tended to attract the wrong kinds of customers, those that are price sensitive, less loyal and more likely to comparative shop.
In a pull marketplace where the customer rules, building brand loyalty is considerably more challenging as products have become increasingly commoditized, brands homogenized and price shopping simplified by advanced search engine technology. Brand loyalty is built on trust. And trust is an emotional state that cannot be attained through advertising and promotion, but rather through customer experience and word-of-mouth. Often it comes down to a specific, memorable experience that changes the game—for better or for worse.
Recently, I went to the local Ultimate Electronics store to shop for a new set of stereo speakers. What I found were so many different makes and models that I had no clue how to go about making a purchase decision, so I asked the sales rep for some guidance and advice. The young man seemed very knowledgeable and he politely told me that it’s a matter of personal preference, as everyone has their own taste in music and sound quality. He suggested I listen to the music I prefer on several different speakers to determine which I like best.
I asked what kind of music he listens to and he said mostly jazz and acoustic stuff, played at lower volumes, so he tends to prefer a brighter sound with more high-end clarity and definition. That would fit my music tastes as well, so I asked which speakers he would buy if shopping for himself. He looked around a little uneasily, as though making sure nobody could hear him, then he told me that, in all honesty, he would buy a pair of Vienna speakers at Best Buy.
I thanked him and went off to Best Buy to purchase a set of Vienna speakers, on his recommendation. When I got to the check-out counter the clerk asked if I wanted to sign up for the Best Buy loyalty rewards program. I told him no thanks I’m not interested, to which he seemed rather astounded. He explained that the points are good for discounts on future purchases. I told him I’m loyal to Ultimate Electronics.
And I have shopped there ever since, because I trust they are looking out for my best interest, not just trying to sell me something. That trust came from a single defining experience with a young sales rep. And I have shared the story on numerous occasions.
Leave a Comment so far
Leave a comment
