At CashLady we celebrate our loyal customers. Brand loyalty is great for brands but as a consumer, it is probably going to cost you – not something you want to happen when funds are low and you are on the verge of looking for a quick loan to make ends meet.
Most marketers are well aware that it costs far more to attract new customers to buy a product or service than it does to entice existing ones.
As a result, you will find that businesses will do all that they can to encourage repeat purchases. Regardless of whether it is baked beans, car insurance or a smartphone.
Love your current smartphone? Can’t fault your current car insurance provider? That is no reason to show unwavering loyalty and blind yourself to the alternatives.
The truth about brand loyalty
In some cases, loyalty to brands is truly about customers loving and advocating for a brand.
More often than not, however, it simply comes down to familiarity and convenience.
In her article, ‘Do you know the truth about customer loyalty,’ Cheryl Baldwin spells out why we reach for the Colgate (or similar toothpaste) time and time again.
“Colgate is prominently displayed and easy to access. It’s in small drug stores, big grocery store and even gas stations. If Colgate has cleaned your teeth for years, chances are your subconscious wants to automatically grab the Colgate and move on.
“While all this is happening, what looks like customer loyalty is actually the human brain doing the easiest thing possible. Once a brand gets you on their track, they should be able to keep you there.”
Do you mindlessly keep reaching for the same brands over and over again? Read on to find out why it is probably costing you money.
Why brand loyalty is costing you money
Now, let us look at four ways that staying loyal to any one brand can ultimately cost you more money. This includes missing out on big discounts for new customers and falling for marketing schemes designed to make you buy more.
1. You never find better alternatives
The trouble with exercising customer loyalty is that you might never try the alternatives, which could be better, cheaper or both.
Think about the massive savings that can be enjoyed by shopping at the German discount supermarkets Aldi and Lidl.
Most of their produce is not big brand names but it is significantly cheaper and arguably just as good.
Step outside your comfort zone and you could make big savings.
2. You stop shopping around for better deals
The great thing about being flexible instead of loyal to one brand is that you are more receptive to good value deals.
Stay open-minded about what you are going to buy, and you can shop around, comparing products and services more objectively than if you are attached to a particular brand.
When shopping for a new phone, for example, instead of automatically reaching for the newest and most expensive Apple, you can compare phone features and costs.
You might be surprised to find that a lesser known brand offers what you need for less.
3. Loyalty cards and rewards programmes make you buy more
Loyalty cards and reward programmes might make you feel special as a consumer, but remember they are designed to increase brand loyalty in the form of repeat purchases.
While reward points can add up and result in so-called savings, remember that these businesses learn all about your buying habits and will tailor deals to encourage you to buy more.
Locking you into one particular store to buy your cosmetics or weekly food shop and petrol means that once again you will be less likely to shop around for better deals.
4. You will miss out on deals for new customers
The trouble with staying loyal is that you miss out on juicy discount deals aimed at new customers.
When it comes to broadband, mobile phones, car insurance and much more, you will find that the best deals are found by switching to a new provider.
Allowing contracts to roll over is easier than switching but it is also going to cost you more – so get online and look for the best deals.