Wednesday, October 22, 2008

Three Kinds of Loyalty

Christie Nordhielm, a clinical associate professor of marketing at the Ross School of Business, University of Michigan has offered another way of defining loyal customers (from her perspective she means brand loyalty). Her point is that companies are taking the approach that they cannot be all things to all people. Further she suggests, they should target their marketing efforts toward the three types of brand loyalty.

She suggests the following types of brand loyalty; namely head loyalty, heart loyalty and hands loyalty. The definition of each of these is given below:

1. Head loyalty - the consumer is just interested in the features of the product. The company would likely implement lots of product improvements and then introduce and promote them heavily.
2. Heart loyalty - the consumer has a really strong emotional brand loyalty. The company would show the heart loyal consumers that they are being heard and understood.
3. Hand loyalty - the consumer seeks familiarity. The company works to maintain the habit, so product changes should be more subtle and gradual. The emphasis should be on maintaining distribution and product quality.

The challenge with this approach is that the skills and resources the firm needs to maintain these different types of loyalty are very different.

Dr. Nordhielm offers an example of each and they seem to make sense.

An example of head loyalty is Toyota. The Toyota consumers regularly list off rational reasons why they buy the car.

An example of heart loyalty is Apple. The Apple consumers are often very emotionally invested in the Apple products.

An example of hand loyalty is Morton salt. The consumers buy salt out of habit, despite the premium price, and they are unwilling to go to the trouble of looking for alternatives.

The bottom line is this is definitely a new way of looking at loyalty. The problem might be that consumers may start with one kind of loyalty and shift to another and it may be very difficult to detect the shift. If the marketing programs are aimed at one type of loyalty and the consumers in that category shift, the results of the shift may not be detected until there is some severe loss to the company both in terms of loyalty and financially.


Mohammed said...

Thanks for this post is very informative and interesting.all the points are very useful. Simple but very effective writing. Thanks for sharing such a nice post.

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