How brands can combat slipping brand loyalty in the US

Dive Brief:

Brand loyalty dipped in the United States this year, a SAP Engagement Cloud survey of 10,000 released last week. This year, only 71% of consumers said they have a favorite brand they love and trust, down from 73% last year.
Across the entire survey cohort — which included consumers from the U.S., UK, Germany and Hong Kong — price and product quality both play leading roles in why consumers switch from brands to which they were once loyal. More than half — 57% — switched brands due to cost considerations and reduced quality of products, the research, conducted by Opinion Matters on behalf of SAP Engagement Cloud, found.
Consumers said the top factors to build brand loyalty were quality products, trusted brand reputation and connected omnichannel experiences, according to the survey.

Dive Insight:

As prices rise and anxiety about the economy persists, consumers are more sensitive to price and willing to trade down.

While price may be a reason to switch brands, the building blocks of loyalty are more nuanced and comprehensive.

The need for emotional connection is clear in the survey findings. Three in five shoppers say they are more loyal to brands that make them feel personally valued.

“Quality, trust and great service still matter,” Keehn said. “Consumers are engaging with brand content, paying for subscriptions, and sharing personal data even as traditional signals like frequent purchases and loyalty program participation decline.”

Consumers are shopping less frequently at their favorite brands and making fewer recommendations. About half of consumers — 53% — say they shop frequently at a favorite brand, down from 63% last year, and 42% of consumers say they recommend a brand to friends or family, down from 48% last year.

Poor customer service is another factor leading customers to walk away: More than one-third of customers selected that as a reason to switch brands.

While the decline in overall loyalty is modest, the findings show brands must continue to earn loyalty, according to Keehn. “Brand loyalty is ultimately driven by emotional connection and the findings suggest that brands can no longer rely on past relationships to secure future loyalty,” she said.