CPG Brands Lose Loyalists in Downturn
June 24, 2009 - Loyal consumers are the bedrock of your brand. Without them, building profitable growth and brand equity would be near impossible. Yet, a new study exposes an unexpectedly high level of loyalty churn across most consumer packaged goods (CPG) brands. For the average brand, only 48 percent of highly loyal consumers in 2007 remained highly loyal in 2008. On the other hand, approximately one-third of all highly loyal consumers completely defected from the average brand in 2008.
The study, "Losing Loyalty: The Consumer Defection Dilemma," is the second in a series of studies on U.S. shopper purchasing dynamics conducted by Catalina Marketing's Pointer Media Network in conjunction with the CMO Council. Findings are based on an analysis of the individual buying patterns of more than 32 million consumers in 2007 and 2008 across 685 leading CPG brands.
According to the study, only four out of 10 brands retained 50 percent or more of their highly loyal consumers from year to year.
Coca-Cola, for example, performed far better than the vast majority of brands analyzed in this study. Yet, approximately one-fourth of Coke Classic's highly loyal brand consumers in 2007 did not remain so in 2008. Thomas' English Muffins and Folger's Coffee also enjoyed a higher retention of loyal customers at 76.3 percent and 60.7 percent respectively.
On the flip side, however, Procter & Gamble's Crest toothpaste lost loyalty in 2008 among 59 percent of its 2007 highly loyal consumers. In addition, approximately 66 percent of Tylenol brand enthusiasts have either reduced or stopped their purchase of the brand in the face of a recession.
The findings make it clear that the issues of customer loyalty and retention represent some of the most critical factors impacting brand success, perhaps more so today than ever.
Click here to read this study in its entirety, including brand defection by category and analysis on the high cost of churn.
The study, "Losing Loyalty: The Consumer Defection Dilemma," is the second in a series of studies on U.S. shopper purchasing dynamics conducted by Catalina Marketing's Pointer Media Network in conjunction with the CMO Council. Findings are based on an analysis of the individual buying patterns of more than 32 million consumers in 2007 and 2008 across 685 leading CPG brands.
According to the study, only four out of 10 brands retained 50 percent or more of their highly loyal consumers from year to year.
Coca-Cola, for example, performed far better than the vast majority of brands analyzed in this study. Yet, approximately one-fourth of Coke Classic's highly loyal brand consumers in 2007 did not remain so in 2008. Thomas' English Muffins and Folger's Coffee also enjoyed a higher retention of loyal customers at 76.3 percent and 60.7 percent respectively.
On the flip side, however, Procter & Gamble's Crest toothpaste lost loyalty in 2008 among 59 percent of its 2007 highly loyal consumers. In addition, approximately 66 percent of Tylenol brand enthusiasts have either reduced or stopped their purchase of the brand in the face of a recession.
The findings make it clear that the issues of customer loyalty and retention represent some of the most critical factors impacting brand success, perhaps more so today than ever.
Click here to read this study in its entirety, including brand defection by category and analysis on the high cost of churn.