Recently I got into an online debate with a bloke who loves BMWs. My only experience with the brand for a period of five years was not a happy one and I shared those views. I wasn’t prepared for his reaction. Such was his loyalty to this brand it was like I had insulted one of his family members. It was almost like he believed he had a relationship with the company.
He questioned the veracity of my experience. He insisted on knowing how often I’d serviced the car, how many kms it had run. How I’d driven it, etc…all to justify his love of that particular brand. He kept telling me he was an engineer as if that would make my bad experiences disappear.
This got me thinking about brand loyalty in general.
To me, at least, brand loyalty is generated by a company who provides a product or service which is widely desired. So much so that it’s name (or brand) becomes the generic identifier of the product or service. How many people have heard “can I please have a Kleenex?” Or “I’m going to Hoover the rug?”
Consumers of these brands know their is an unwritten contract between they and the company. The company keeps delivering the best product for the price and the consumer keeps buying it. Trusting that it is what they have come to expect it to be.
But once that trust is broken, you would think that the consumer would look elsewhere. You’d be surprised to find how long we as consumers stick with a brand long after the initial mystique has worn off.
I’m not immune to brand loyalty. For almost 18 years I have been a loyal Apple user. I loved everything they did from the iPod onwards. You may know that Apple is the most valuable brand in the world (for now).
We now have three iPods, two iPads and numerous iPhones and Mac Minis that are no longer in use. Then, around three years ago I started to question why I was paying such a high premium for these phones when there was a perfectly good alternative for around a third of the price. So, recently we (my business partner and I) switched to Android and got a free smart watch thrown in.
Now there’s a painful experience.
I would recommend root canal surgery in preference to the experience Apple puts you through to escape their environment. It’s a little like that line from that famous seventies Eagles song “you can check out anytime you like but you can never leave.”
Yes I’m off the iPhone but… if I want to take all my work files with me I still need to use iCloud. If I want my music to come with me: ditto. If I want to take the books I purchased off iBooks – I can’t. Yes I know I paid for them. I just have to retain an old iPad or iPhone to read them. And don’t get me started on iMessage.
Apple counts on you being familiar with their operating systems and hopes that (along with some fantastic industrial design) will keep you loyal to the brand.
We’re still using Macs though. We haven’t quite made the leap to Windows yet.
Similarly, I have been using the same branded sound system for twenty years: Yamaha. There might be other brands which are better but I find the operating system familiarity in a complex home theatre setup too much of a hurdle to change (wiring inside walls etc). Also, I haven’t heard another system (for the price) which, to my ears at least, sounds better.
I know, Iknow…first world problems…but I’m not finished yet.
About six weeks ago, and after over three decades of using, and for the last fourteen years fighting with, Telstra I switched. That was an abusive relationship. One in which Telstra charged me fees for not always delivering a service which I paid for – namely a functioning internet connection. I couldn’t switch as no other provider was any better (according to my neighbours).
My saviour was the nbn. I now get speeds which are around 50 times faster than what I got with Telstra at a fraction of the price with the added bonus of being able to finally get rid of Foxtel as well. Netflix and other streaming services don’t work well on 0.93 MB/s download speeds.
I know I probably could’ve received similar speeds with Telstra nbn but I wanted to make a point to a company who had taken me and my complaints for granted for decades. They clearly missed the point.
The above are just some of the reasons why people do or don’t change from one institution to another. Readers of this site may recall my perplexity when clients think they have a relationship with their banks.
They just don’t.
I’m not criticising the banks. For better or worse, the days of relationship banking are long behind us. These days a client has to fit within certain risk parameters to even have an account with a bank.
For instance, five years ago a small business relationship manager in a major bank may have had 30-40 clients. These days they will have hundreds and probably haven’t received a real pay rise in that time and, to add insult to injury, probably have had bad annual reviews because they just can’t get around to all their clients. So motivation to maintain your relationship is not very high on their list of priorities. Most likely they’re looking for a new job to avoid being performance managed out.
What staggers me is that around forty percent of borrowers still go directly to their bank for a loan (the rest get their loans arranged via a broker). Why do people stick with their banks? Here are some of the reasons given to us:
- It’s too hard to change
- I have to re-direct all my direct debits
- I’m too used to the on-line banking system.
- My clients are used to paying to that bank account
- I’ve been banking with them since I was in primary school
- My parents used to bank with them
- I’m friends with the teller
- I like the colour scheme of their branches
None of the above are valid reasons not to change if you’re in an abusive relationship with your bank OR if your relationship with your bank is non-existent but you can’t be arsed changing. You know, one where they know all the above and charge you more than you should be paying if you shopped around.
If I can make the change from IOS to Android – the single most difficult thing to do since the moon landing – anyone can change banks.