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The End of Brand Loyalty As We Know It

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The End of Brand Loyalty As We Know It

Brand loyalty is defined as positive feelings toward a brand and dedication to purchase the same product or service repeatedly,...

4 Minutes Read

Brand loyalty is defined as positive feelings toward a brand and dedication to purchase the same product or service repeatedly, from the same brand, regardless of a competitor's actions or changes in the environment. This definition worked well for decades and served as a key performance indicator for businesses. The rise of machine-learning algorithms behind recommendation engines, e-commerce sites, mobile apps, wearables, smart speakers, and other AI-powered systems have turned the table on businesses. Today, consumers are more likely to trust the intelligent algorithms behind voice-based personal assistants and other machine-intelligence-driven systems than the information provided directly by businesses via their websites.

The bigger impact for businesses is that nearly forty-five percent of consumers are indifferent to whether the brands they used today disappeared. In fact, two-fifths of consumers would buy a brand they’d never heard of if it was recommended by Siri, Alexa, or Hey Google. Yes, you read it right. These changing consumer dynamics are forcing a rethink of the very meaning of “brand” and the resonance of a “brand name.” Rather than relying on legacy brand reputation, consumers increasingly want assurance they’re getting “the best” product or service for their needs and not being swayed by commercial messages. If an app or bot or personal assistant assures them of that, then so be it. The famous line from Romeo and Juliet sums up the current brand dilemma:

“What’s in a name? That which we call a rose

By any other name would smell as sweet.”

Brand loyalty is turning into autonomous buying and subscriptions: “Hey Alexa, buy some milk for me.” Every time these interfaces fulfill our needs efficiently and effectively, they take a further step in strengthening their relationship with us, challenging the very meaning of brand loyalty as we know it today. Soon, voice interfaces will be embedded in many other consumer goods, from TVs to cars. These voice-based algorithms will create a walled garden around customers that will be impervious to businesses that don’t adjust their brand strategies to blend smoothly into consumers’ lives. The issue is that traditional businesses fail to fit in this new way of people’s hyper-lifestyle, creating a disconnect between what customers want and what brands deliver.

Algorithms are the new interface between brands and consumers, and trust is their fuel. Machine intelligence is expanding consumers’ intelligence quotient by giving them more ways to access information and explore more choices, making them more powerful and more difficult to predict than ever before. As algorithms get smarter and more personalized—thanks to both increasingly sophisticated techniques such as machine learning and the abundance of data they can access—consumers are increasingly willing to pass the baton to the machine. Brands will need to earn loyalty not only from consumers but also with algorithms that consumers trust. In short, the future of brand loyalty will be human + machine. Businesses that reimagine their brand, rebuild digital reputation, rethink their relevance to form deeper relationships with AI-augmented consumers, and resonate with consumer behavior are most likely to emerge as category leaders in the age of algorithms.


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