Consumer Brand Loyalty May Never Recover From The Recession

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Consumer loyalty declined in the recession and may soon go the way of the dodo, according to a new study by Catalina Marketing’s Pointer Media Network.An analysis of 32 million consumers in 2007 and 2008 across 685 leading brands revealed that 52% of “high-loyal consumers” — those who bought 70% or more of goods from the same brand in a year — started buying more from a competitor the following year or left the brand entirely. Nor were there new high-loyal customers to replace the old ones.

“The concern is that consumers who switch will build new brand rituals and allegiances that endure far beyond the recession,” Pointer Media said, noting consumers’ newfound cost-cutting measures.

The study cites one premium orange juice brand, whose 64.8% of highly loyal consumers either switched or completely left the brand the following year. That loss in loyal shoppers translated to 34% fewer dollars spent on the brand in 2008, and a devasting 8% decline in potential overall revenue.

Among those products that fared the worst, All Purpose Cleaner brands saw 62% of its customers stop being highly loyal between 2007 and 2008, and Canned Tomatoes and Cereal respectively suffered a 65% shift within the same time.

Of course not every consumer tends to buy the same things over and over, but the study did note that just 2.5% of regularly shoppers comprise up to 80% of sales for some brands. That’s a big reason to pull out all stops for your base.