Consumers are increasingly overwhelmed with marketing and messaging from brands every day. Ads are everywhere – from TV commercials and search engines to social media feeds and influencer posts. Brand messaging is unavoidable in this day and age. Not only do brands need to stand out among the noise, but they also need to keep customers coming back to be successful.
In this era of marketing, brand loyalty is more important than ever. Attracting new customers can be significantly more time-intensive and even costly compared to retaining existing customers. Industry research has shown that acquiring new customers costs five to ten times more than selling to a current customer. Furthermore, one study found that current customers spend 67% more on average than new customers. It is clear that businesses will need to retain customers and drive brand loyalty to be successful.
Our recent survey of US consumers explores their loyalty to brands and offers insights on how businesses can increase consumer loyalty.
Are Consumers Loyal to Brands?
Over half (54%) of consumers say they are generally not loyal to brands and are interested in trying new brands or shopping around. This trend has not changed over time – nearly two-thirds (62%) of respondents say their level of loyalty to brands has not changed over the last 12 months. This finding may be a double-edged sword for many brands. On one hand, brands have the potential to win over customers from other competitors, however, brands will also need to ensure their customers return.
Of note, women (58%) are more likely to say they are not loyal to brands and are interested in trying new brands or shopping around compared to men (46%). This should be of special interest for brands as women wield impressive economic influence. According to one article from the World Economic Forum, today women control or influence 85% of consumer spending.
Brand loyalty can also be impacted by age. This research found that Gen Z is the most loyal to particular brands of any generation. Nearly half (47%) indicate that generally, they are loyal to brands and are not interested in purchasing products from new companies. In comparison, Gen X is the least loyal to brands, as three in five (60%) report they are not loyal to brands and are interested in trying new brands or shopping around.
Brand loyalty is impacted by gender and age – but what about the products themselves? Consumers show differing levels of loyalty by product category. Over half of consumers say they are very or extremely likely to repurchase an item from the same brand in the food and beverage and electronics (such as cellphones and laptops) categories without researching alternatives.
Top 5 categories where those surveyed are likely to repurchase a product from a brand without alternative product research:
Electronics companies face less competition for consumer loyalty, as two in five (42%) consumers report only regularly purchasing electronics from one or two brands. Other sectors like apparel face greater competition for consumer attention and loyalty. One-third (34%) of consumers say they purchase clothing or shoes from 5 or more brands. Brands should be especially cognizant of the fact that consumers regularly purchase from fewer brands for categories often involving larger purchases, such as cars, electronics, home appliances, and luxury items. In these categories, it is even more important for brands to drive loyalty and create returning customers to ensure success.
How Can Brands Improve Loyalty?
While consumers indicate willingness to try new brands and shop around, there are steps businesses can take to drive brand loyalty. Notably, approximately half of consumers say the quality of products (55%) and price of products (49%) make them more likely to repurchase products from a brand. Businesses need to prioritize product quality and price to keep customers coming back.
Of note, women are especially price conscious as over half (53%) say the price of products makes them more likely to repurchase products from a brand, compared to 44% of men. As women largely hold the purchasing power and most influence consumer spending in the economy, brands should be cognizant of how any shifts in price could negatively impact a key audience.
Interestingly, Gen X, Boomers and the Silent Generation are most likely to say the quality and price of products makes them more likely to repurchase products from a brand.
While Gen Z still places the highest level of importance on quality and price of products, they also indicate that factors like positive reviews from friends (16%) and convenience (14%) make them more likely to repurchase products from a brand.
Wrap Up
The data shows that a majority of consumers are generally not loyal to brands. Understanding what motivates customers in their purchasing journey will give organizations a leg-up against competitors. Businesses need to capitalize on this opportunity to win over customers from competitors while simultaneously creating returning customers through prioritizing product quality and price.
As consumers become increasingly bombarded with marketing from brands across their devices and platforms, businesses need to stand out from competitors and drive customer loyalty to be successful and propel growth. Businesses that invest in driving brand loyalty will not only profit economically, but also create a community of brand advocates that will empower greater success in the future.
Methodology
This Research Roundup feature is brought to you by our market research division within TEAM LEWIS.
TEAM LEWIS surveyed 1,000 individuals aged 18 and older across the United States. The sample was census-balanced across age, race, gender, and region. Responses were collected in an online survey platform from February 26 to March 1, 2024. The respondents were independently sourced from Paradigm Sample.
For more information on upcoming trends, insights in the industry, and how we can help, contact us today by emailing [email protected].
