The psycho-logics of consumer loyalty

Consumer loyalty takes a whole new turn when considering the market dynamics that shape the relationship between consumers and their brands. Psychologically, we differentiate between six different loyalty continents in the worlds of consumers.

The Loyalty Fields:

  • Everyday Companions (e.g. coffee, snacks, non-alcoholic beverages)
  • Personality Markers (e.g. cars, fashion, cigarettes)
  • Growth Supporters (e.g. banks, cell phones, logistics)
  • Mood Changers (e.g. beer, TV, tourism)
  • Protectors (e.g. medical products, insurances, baby care products)
  • Style Helpers (e.g. cleaning products, body care, drug stores)

1. Client satisfaction does not necessarily imply customer loyalty

Taking an example from our personal lives, we all know that some dissatisfaction with our partner can actually strengthen the relationship. Often, we feel most closely connected after a fight or a phase of relationship doubts. Market dynamics are similar. Brand loyalty is rarely directly connected to the measurable client satisfaction. Accordingly, it is not enough to simply measure it in the hopes of tracking loyalty. It is important is to understand the sometimes awkward desires and inner contradictions of consumers.

2. The psychological market logics and not the consumer type define loyalty behavior

Usually, a combination of socio-demographic and psychographic criteria is used to define different consumer types, and in a next step, predict their loyalty behavior. This might help visualize the consumer better, however, does not describe the type of relationship he or she develops to a brand as it does not account for an important factor: the relationship context. For example, the relationship to our partner is different from the relationship to a colleague, which again is different from our relationship to our kid.

Accordingly, our relationships to brands are strongly influenced by the market a brand belongs to, e.g. consumer loyalty towards cars is fundamentally different from consumer loyalty towards a bank. Our research shows that consumer loyalty within a certain market shows surprising similarities among various consumer types and is driven by collective desires and psycho-logics. This knowledge can be used strategically to direct the individual consumer loyalty strategy.

3. An example: consumer loyalty in the category “Protectors”

Brands in the category “Protectors” often trigger consumer relationships similar to the relationship to their own parents. These “Protectors” remind consumers of the constantly lurking threats of everyday life. They might get sick or unlucky or affected by an unforeseeable change in our lives. We sense that we are not able to defy these superpowers or the unpredictability of fate by ourselves. Accordingly, within this category, consumers seek an ally or strong supporter to give them security, ease and confidence. Usually, simply contributing to an insurance policy makes people feel as if this sacrifice will make fate smile upon them.

Within the category “Protectors”, consumers look for products and services that provide help, protection, support and authority. Yet at the same time, they are conflicted: they do not want to be dependent on the help of others and see their autonomy attacked. Accordingly, consumers find themselves torn between the need for support and desire for independence. If the need for support is more dominant, consumers usually look for well-known insurance companies that are like a fatherly authority, providing intense, direct and personal care for their customers.

If the desire for independence is more dominant, customers usually look for smaller, less known insurance companies with little or no personal interaction, but call centers and online services.

The behavior of consumers in the market is driven by searching for a close relationship, yet at the same time not becoming too obvious so as to still declare their own independence.

Marketing measures can strategically build on these insights: dosage and context are very important! Below the line communication measures are necessary to demonstrate authority, yet feel anonymous enough to not confront oneself with one’s own vulnerability. Facebook, on the other hand, can intrude into the personal space and remind oneself too strongly of potential helplessness. A hotline secures comfort in times of well-being and promises help in times of need. In addition, insurance customers want to be honored for their loyalty and the sacrifice of giving up some of their independence: they expect to receive better treatment for long-term commitments as well as time and money savings the longer they have been insured through a certain policy.

4. Development of the specific market map for strategic loyalty management

As a first step, it is important to understand to which market-driven loyalty category the brand belongs. As soon as the market-driven motives are analyzed, we at rheingold take an in-depth look at the brand-specific loyalty principles. Both market and brand specific motives build the strategic foundation for successful consumer loyalty measures.
© 2015 rheingold