Brand loyalty – it’s good for business, but doesn’t benefit the consumer, here’s why.
Loyalty - faithfulness or devotion to a person, country, group or cause. And, of course, in these consumerist times, we can add product to that list.
Brand loyalty is what many big companies rely on, as our repeat custom boosts their coffers. But it’s not just our loyalty they’re after; it’s also our recommendation of said brand to our friends and family.
And our recommendations are responsible for keeping the best-known brands in the UK at the top, according to a recent survey.
First Direct, Samsung, Saga, Tesco Mobile, Churchill Insurance and Apple are among the most recommended brands according to UK consumers. Satmetrix, the customer behaviour analysis firm which carried out the research, surveyed more than 6,800 UK consumers who had purchased products or services from each company within the previous 12 months.
So brand loyalty benefits businesses. But does it benefit the consumer? Of course not! Loyalty doesn’t pay. What pays for the consumer is to shop around for the best deal.
“Shop around” - such an important mantra that a whole industry has been built off the back of it. Price comparison sites like Confused.com exist because of a need to make finding the best deal in a crowded marketplace an easy experience.
But for every money-savvy shopper out there, there are plenty more convinced that their bank, credit card provider or gas and electricity supplier has their best interests at heart.
Think about newspaper, television and radio adverts for savings accounts, mobile phones, TV and broadband packages etc, with their attractive interest rates and low prices. More often than not, these deals are reserved for new customers only. So whether your loyalty is purposeful - you think the brand you’re with is the best - or whether it’s lazy - you simply can’t be bothered to shop around - , the only winner is the company.
Of course, I’m not immune to the power of brand loyalty, both purposeful and lazy. I used to be purposefully loyal to Heinz baked beans. Why? I’d grown up with them, I liked the taste, and they were the priciest. A high price often makes people think something’s better: a colleague admits she used to choose travel insurance like she chose wine – not the cheapest, but the second cheapest because she didn’t want to look too, well, cheap! (We all have an inner snob - admit it, we’ve all looked down at the supermarket shopper with a trolley full of value goods?!) But back to beans.
My predilection for Heinz changed five years ago when the newspaper I worked for had a delivery of Branston baked beans (it was for a promotion). I was a bit strapped for cash so I took a tin home one night. And my, they were so tasty, I changed my beans buying habit there and then.
Now, this switch hasn’t saved me money. It wasn’t about that. But loyalty borne out of laziness has cost me money when it comes to the cost of heating and lighting my home.
For years, I read all the bumf about how switching gas and electricity suppliers could save you money. But for years I did nothing – much to the benefit of British Gas, I’m sure. But a recent house move led me to compare prices for the first time – and I’m now en route to saving myself more than £100 a year.
Of course, loyalty isn’t just about price, it’s about service too. But that’s the point of working out the best deal for you – consider price, service, and any other area that matters to you, such as opting for a green energy tariff because of your environmental views, even though this tariff may not be the cheapest.
Be an active consumer: weigh up what your brand loyalty is costing you, and you’ll be the one benefitting from your financial decisions, not big business.
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