Brand Loyalty is Not to Be Bought, But to Be Earned

08/03/2012 09:58 GMT | Updated 06/05/2012 10:12 BST

Brand loyalty, brand equity, margin, ROI etc. the list can go on and on to create a list of keywords for SEO and buzzwords for a pitch document. Here is where a lot of money and resources spent (for some, but wasted for some others); this is the world of business and hiring agencies or perhaps forming a team with a punchy funky title to establish "loyalty", "trust" and to enhance "reputation".


What brands need to remember is customer loyalty is not there to buy, but to earn. One may argue brands like Tesco and Sainsbury's have loyalty schemes and they offer discounts exclusive to those sign up to the "scheme". But another may argue how much you have to give (as a consumer) before you get £1 off your next shopping and whether the offer is exactly on the product you would like to buy next (and not of those the database suggests based on your shopping behaviour). Such brands encourage people to give away their personal information for FREE to be monitored and their consumption behaviour, including purchasing methods analysed prior to get some so called "exclusive offers".

Brands encourage people to sign up to their loyalty programme/s, as they see it another avenue to:

* Market research - and sell more stuff by creating more needs perhaps

* Consumer behaviour - to establish how else they can market their products

* Consumption habit - to gather different ways of maintaining the same habit if not encourage more


* Up and cross selling products - make temporary feel good factor in consumers but in favour of

financial health of their own brand

* Selling personal details to 3rd parities (depending on above analysis), such as insurance

companies - OBS!

Question: It is a good business for big brands, but it doesn't seem to be as good for smaller businesses despite the fact they do loyalty schemes, but why?

Answer: Maybe because they don't have pages of small prints and deals with insurance companies and cold calling companies etc. #in this fashion bigger brands increase sales (quantity) and still making good margin, but smaller businesses sell more products just cheaper to survive.

Most loyalty schemes are buying people's information for pennies but making pounds out of them. While the owners of the information are walking on streets or sleeping over night, there are businesses making money out of them; that simple!


As you may now guess, money doesn't buy brands trust; it won't enhance brand reputation. It may buy your brand some short term support though, which is way different than building or maintaining a sustainable business. There are still handful number of business and agencies practice some old techniques to have their hands on people's money. Some of the some old school sales and marketing tricks work for businesses (sometimes); for example BOGOF or discount vouchers (but still for a price for the end consumer). The most expensive offers by brands are the 'buy now pay nothing till next year' and some of the 'FREE' trial promotion things. You may however argue this and it would be interesting to see your views too.