Is Technology Destroying Brand Loyalty?

Is Technology Destroying Brand Loyalty?How important are brands to today’s business buyer? Common wisdom is that a trusted brand is critical for winning the heart and wallet of a buyer. But research is starting to raise a concerning question – is technology destroying brand loyalty.

Recent research from Strategy+Business seems to indicate that for more and more purchases, especially in a day of instant price comparisons, low price and good user reviews are winning the day more often, both for the consumer and for business.

The authors write “relative evaluations are based on comparisons with whatever happens to be most prominent, or placed in front of you on a store shelf or a catalog page. But absolute evaluations go beyond those constraints to use the most relevant information available about each product and feature, and they usually produce better answers.”

Social media plays a key role in this shift, as users decide if a brand or product is “good enough” based on feedback from experts, opinion pieces and simply likes from friends or peers. A backbone of the Facebook advertising model, the idea that a third party is unbiased and able to provide true feedback is changing the idea of marketing and sales. In fact, if you can’t find the information you need on the internet, send out a Tweet or post on your social media of choice and the recommendations will come pouring in.

Last century, marketing was about communicating values and differentiation to buyers relative to benefit or reference points. Now we are increasingly facing a world the authors call “Planet Absolute”, where all features, benefits and brands are level set to the same baseline. What’s left is price.

It is unlikely, even with the biggest of data, that every transaction will have perfect information. But there is perhaps a “Planet 90%” that results in much the same situation. After all, can you really name the differences of an HP or Dell laptop?

We’ll dig into this idea more deeply tomorrow.  But what about you?  Have you found yourself more or less loyal to a brand when you can find alternatives at lower price points on the web?


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