What Drives Brand Loyalty?

November 9, 2016

facebookiq-brand-loyalty-drivers-nov2016More than 3 in 4 adults in the US return to the same brands over and over to make purchases, according to a study from Facebook IQ. These are fairly evenly split between “Brand Loyalists” who say they make repeat purchases and are loyal to a company (37% of consumers) and “Repeat Purchasers” who indicate that they make repeat purchases but aren’t loyal to a company (40%).

The study analyzed consumer loyalty in 5 verticals: grocery; auto insurance; airlines; restaurants; and hotels. Interestingly, the results suggest that “Brand Loyalists” – who are the most loyal to brands – tend to be driven by emotional factors such as trust and service. “Repeat Purchasers,” by contrast, who buy often from the same brand but don’t describe themselves as loyal, are instead motivated by functional considerations such as price and convenience.

The top 2 reasons given for loyalty and repeat purchases can be seen in the chart above (click to enlarge). It’s worth noting that utilitarian qualities are also important to Brand Loyalists, per the report, such that these needs still need to be met, but also augmented with more experiential factors.

Meanwhile, the report points to some barriers to loyalty that hinder Millennials more than Boomers:

  • – For auto insurance, Millennials were 1.44 times more likely to cite a move in location as a barrier;
  • – For grocery, Millennials were 2.5 times more likely to indicate that a store’s level of hygiene is a loyalty barrier;
  • – For restaurants, the lack of healthy options was twice as likely to be cited as a barrier by Millennials;
  • – For airlines, difficulty reaching or contacting the airline was cited as a barrier by 2.33 times as many Millennials as Boomers; and
  • – For hotels, Millennials were twice as likely again to say that difficulty reaching or contacting the barrier is a barrier.

In highlighting other consumer segments, the study finds that brand loyalty tends to increase alongside income level, and that new parents (those with children under 1 year of age) are more likely to describe themselves as loyal than non-parents (those without children under 18).

In comparing brand-loyal new parents to brand-loyal non-parents, the study discovered that new parents over-indexed in loyalty more in experiential sectors such as hotels (index of 141) and airlines (124) than in everyday verticals including grocery (113) and auto insurance (102).

About the Data: The results are based on a survey of 14,700 adults (18+) in the US, conducted in March 2016.

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