Sink or swim. Will loyalty save your brand?
How much longer is it until Amazon’s ship tips and capsizes?
This may seem unlikely today, but the life spans of modern companies are actually shrinking because, according to McKinsey, “if you were listed in the S&P 500 in 1935, the life span of a company was 90 years. Today it is 18 years”. Where does your brand fall in the modern age’s corporate life cycle? Tick tock.
New brands are appearing and disappearing faster than ever before. Corporate disruption and transformation are exploding within the market, encouraging brands to lead the creation of new business or customer trends in order to stand out. In order for trend setting to be effective, brands must maintain strong loyalty – even if it’s a default behavior. However, given the state of the market today, is it really possible to sustain such commitment when the “new thing” is always just around the corner?
Some brands have popped up out of thin air like Soul Cycle, an indoor cycling chain. They’ve disrupted the fitness industry by using instructors as brand ambassadors, implementing a pay per class model, and, most significantly, building this addiction by combining physical exercise, spirituality, and community as one. They’ve cracked the code necessary to beat out the competition, but can they stay there for much longer?
The newness appeal wears away over time, so brands must strategize ways to continually engage customers.
Word of Mouth (WOM) is one key way to build this. The power behind WOM is due to its authenticity and zero cost. In fact, 82% of Americans seek out recommendations before making purchases, so it’s important that you consistently surprise and delight consumers to give them something to actively promote. Lululemon, for example, primarily relies on the voices of loyal customers instead of advertising to spread buzz.
Brands must also be proactive to build loyalty. Understanding your target customer, who are they, and why they connect with your brand is key to crafting a strategy based on these insights. But, acting upon them quickly and efficiently is where real engagement is built. Sephora’s launch of Virtual Artist, a virtual makeup try-on innovation, represents a move to appeal to the growing expectations of the beauty community. It’s aimed at making shoppers feel more confident in their purchases and has culminated in great success. So don’t be afraid to try something new, as it can immensely impact brand loyalty for the better.
Given the disruptive state we are currently living in, building brand loyalty should lay at the heart of any business strategy. It’s what gives brands staying power amidst the muddy waters of the competition. Big brands may obtain market share, but, at any moment, the “new thing” can pop up and disrupt the tide.
Amazon is riding high today, but then again Sears said the same thing not too long ago.