Of perception, differentiation and loyalty

David Foley is a marketing consultant and an instructor in database marketing at York University in Toronto. He may be reached at (416) 253-1224; by fax at (416) 253-4637 or via e-mail at dfoley@idirect.com....

David Foley is a marketing consultant and an instructor in database marketing at York University in Toronto. He may be reached at (416) 253-1224; by fax at (416) 253-4637 or via e-mail at dfoley@idirect.com.

What your best customers think of your product or service, in relation to competitive offerings, can significantly affect your ability to create long-term, profitable, loyal customers. For instance, if heavy users of laundry powder believe that two brands, say Tide and Sunlight, are identical in cleaning performance, the tendency will not be loyalty to one particular brand but to price.

Since consumers generally make decisions in their best economic interests, the majority will pick the lower-priced of two or more ‘equal’ brands. Brand parity – or at least perceived brand parity – is a loyalty killer. This is certainly why many products make Herculean efforts to appear distinctive (and thus unequal). Laundry powders add small coloured crystals to the mix, toothpaste comes in multi-coloured stripes or gel format and cosmetics rely on packaging rather than product differences.

The notion of consumers operating in their best economic interests explains why one will observe automobiles bearing the same license plate at two (or more) different grocery stores – which means that the same household, if not the same person, is shopping at both.

Similarly, only those people who believe that they will recoup their investment and pay less for books, magazines and CDs will bother to join Chapters’ Chapter 1 Club or Indigo’s Inner Circle. (Both are Heather Reisman nameplates.) It’s the same story for every other fee-based consumer loyalty program on the planet.

But, attitudes other than economic self-interest come in to play: While the phrase ‘keeping up with the Joneses’ belongs to an earlier generation, its effect can be noticed even today. Basketball hoops, landscaping, cars, swimming pools and more have all been purchased simply because a neighbor purchased same.

A good friend of mine will tell you that a Jaguar is a fine automobile, even if it does find its way to the shop more frequently than it should. This was his experience with the first Jaguar he purchased…and the second…and the third…and the fourth! (He now drives a Lexus.) Another good friend will tell you that an automobile is basic transportation that should be expected to provide 10 years of reliable service before being replaced. (Since his Nissan is about 10 years old, a new car purchase is likely in the next few months.) Clearly, the significantly different attitudes of these two men will influence their purchase criteria and ultimately their automobile purchase decisions.

With its launch of easyPAY, its fast pay option, Shell Canada is tackling the prevailing attitude that ‘all fuel brands are the same’ with a timesaving message to its customers and prospects. This launch is reminiscent of the introduction of Air Miles at Shell, a successful move and one which, arguably, led to the introduction of customer-reward programs at Esso, Petro-Canada and Sunoco.

ING Direct challenged the notion that ‘all banks are the same’ by offering higher interest rates on deposits and a ‘branchless’ environment and took thousands of customers from the big, traditional banks. And, Tim Hortons tackled the belief that ‘fast food is defined as burgers and fries’ with fresh soup and sandwich luncheon offerings that have vaulted it to the number two place in the fast-food lunch market. (As you probably know, burgers-and-fry chain Wendy’s owns Tim’s.)

In business-to-business marketing, attitudes are often expressions of risk avoidance. My first computer (purchased around 1985) simply had to be an IBM, because I held the belief that superior service and support would back my purchase. Since this belief was never tested, I suppose I was right. That computer, long retired even as a boat anchor, has been replaced by a series of Toshiba portables and an HP desktop. To this day, my belief in the strength of brand is influencing my purchasing decisions … and probably costing me money as well.

Two questions for your consideration: What are the prevailing attitudes of my customers towards my product/service category? How will (or should) these prevailing attitudes influence my marketing strategy and tactics?