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BRAND LOYALTY ASSIGNMENT 1 Marketing Paper: Brand Loyalty Assignment Faizan Malik School of Business, Liberty University Author Note Faizan Malik I have no known conflict of interest to disclose Correspondence concerning this article should be addressed to Faizan Malik Email: FMalik@liberty.edu

BRAND LOYALTY ASSIGNMENT 2 Introduction Defined as a consumer’s positive feelings towards a brand despite competition offering similar products or services, brand loyalty has often been used as a benchmark for businesses across varying industry for customer satisfaction and retention. Reichheld elaborates that customer loyalty extends beyond a customer making repeat purchases, as some may make repeat purchases despite no loyalty to a particular brand while others may not make repeat purchases to a brand, they are loyal to (Reichheld, 2003). As such, brand loyalty should be examined to determine if it remains relevant for today’s market. Brand Loyalty: The Good Despite various forms of customer loyalty existing throughout history, the emphasis on brand loyalty came into fruition in the 1990s when business began to understand the correlation between customer loyalty and long-term profitability, both in retail and business-to-business commerce (Reichheld, 2000). Brand loyalty can be created through a plethora of methods. Beginning with the products or services themselves, firms who offer high quality goods are often those who build the strongest sense of brand loyalty. Apple, for example, despite their premium pricing models have built a significant since of loyalty amongst their consumers. Next firms need to focus on the customer experience when dealing with their brand, specifically on customer service. Jahanshahi et al. explains that the quality of customer service is one of the most important factors in identifying new customers, with the key to loyalty being providing customers with their undiscovered needs (Jahanshahi, 2011). Lastly, firms need to provide their customers some level of engagement, such as loyalty programs or creating an online community for their brand, which can both strengthen consumer loyalty to a particular brand.

BRAND LOYALTY ASSIGNMENT 3 Mellans et al. explains that a firm’s capability to attract customers to their brand, retain them, and make them loyal to their brand is crucial for the survival of a company (Mellens et al., 1996). As such, firms need an accurate way to measure and quantify brand loyalty, then apply changes as needed to areas of detriment. Given there is no singular method of measuring brand loyalty, many organizations use a combination of various metrics to form key performance indicators to aide their business. Such metrics can include customer satisfaction, brand trust, brand esteem or goodwill, and perceived quality vs value. However, arguably the most influential metric in regard to brand loyalty is that of the Net Promotor Score (NPS). Using a single question survey, NPS ask consumers how likely they are to recommend a business, product, product or service to another person. Schneider et al. explains that’s personal recommendation will often lead to positive first impression of the brand to other potential customers, new purchases, and growth in sales (Schneider et al., 2008). Reichheld attributes the significance of the NPS to customers putting their own reputation on the line when recommending a brand, as such, they would only recommend brands that they are extremely loyal to (Reichheld, 2003). Brand Loyalty: The Bad Despite the numerous benefits, brand loyalty is not without its own detriments, and many argue that the metric of brand loyalty is no longer valuable for firms. With globalization expanding previously isolated markets and consumers able to shop competing brands in the comfort of their own, it is argued that brand loyalty will simply go extinct in the near future. However, to have a better understanding the potential for obsoletion, one must understand the varying degrees of brand loyalty in the eyes of the consumer. Brand loyalty typically falls into two main categories: functional and emotional. Functional brand loyalty involves how

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BRAND LOYALTY ASSIGNMENT 4 convenient, effective, and well-priced a product or service is, whereas emotional brand loyalty involves an affection for an entire brand rather than a single product. When firms rely on functional brand loyalty, as opposed to emotional, they are more likely to lose customers if cheaper ore more convenient options become available. Conversely, emotional brand loyalty creates a connection between consumers and the brand, with the customers choosing the particular brand over competitors regardless of factors such as price or convivence (Fernandes & Moreira, 2019). The argument against brand loyalty is not limited to the concept itself, but also extends to the established metrics. NPS, which is often considered to be the golden standard for assessing brand loyalty amongst consumers, also presents with its own detractors. Fisher & Kordupleski equates NPS to a business that only manages their finances based on net income and do not include other metrics such as cash flow, production, costs, etc (Fisher & Kordupleski, 2019). A business cannot be run on net income alone, similarly, it is argued that brand loyalty can be based solely on a customer’s willingness to recommend a firm. However, Reichheld et al. argue that the issue is not NPS itself, but a failure to understand the respective barriers that need to be overcome to best utilize the metric. These include having a superficial understanding of NPS, poor incentive programs, inadequate feedback measurement, improper measurement timing and place, anonymity, and poor behavior within the firm (Reichheld et al., 2022). Biblical Integration Psalm 12:1-2 states, “Help, Lord, for no one is faithful anymore those who are loyal have vanished from the human race. Everyone lies a to their neighbor; they flatter with their lips but harbor deception in their hearts” (New Oxford Annotated Bible, 2001). In this verse, David prays for repentance from an evil, Godless culture in which there is essentially an absence of faithful

BRAND LOYALTY ASSIGNMENT 5 believers. Even beyond David, Elijah felt as if he was the only God-Honoring person left in the land of Israel, as narrated in 1 Kings 18:22; 19:10. Similarly, businesses must understand that true brand loyalty is not only difficult to obtain, but difficult to maintain as well. In the absence of emotional brand loyalty, globalization and E-commerce have diminished the consumer’s need for brand loyalty. Conclusion Brand loyalty has long been a part of how businesses were run, those who can keep bringing their customers back are likely to be the most successful. However, with advancements in technologies and the rapid expansion of globalizations, many now argue that brand loyalty is no longer a key driver behind a successful business. Even long-standing metrics, such as the NPS, have come into question regarding their validity. This can be attributed to brand loyalty becoming more difficult to obtain, as opposed to becoming obsolete. To be successful now, firms must develop a better understanding of their customer’s changing needs as consumers have a larger variety of available options to them. Furthermore, firms that develop emotional brand loyalty with their customers often yield the best results.

BRAND LOYALTY ASSIGNMENT 6 References Fisher, N. I., & Kordupleski, R. E. (2019). Good and bad market research: A critical review of Net Promoter Score. Applied Stochastic Models in Business and Industry , 35 (1), 138-151. Jahanshahi, A. A., Gashti, M. A. H., Mirdamadi, S. A., Nawaser, K., & Khaksar, S. M. S. (2011). Study the effects of customer service and product quality on customer satisfaction and loyalty. International Journal of Humanities and Social Science , 1 (7), 253-260. Mellens, M., Dekimpe, M., & Steenkamp, J. B. E. M. (1996). A review of brand-loyalty measures in marketing. Tijdschrift voor economie en management , (4), 507-533. New Oxford Annotated Bible. (2001). Oxford University Press. (Original work published 1973). Reichheld, F. F. (2003). The one number you need to grow. Harvard business review , 81 (12), 46-55. Reichheld, F.F, Darnell, D., & Burns, M. (2022). THE ART AND REWARDS OF WINNING ON PURPOSE. Leader to Leader , 2022 (104), 39-44. Reichheld, F. F., Markey Jr, R. G., & Hopton, C. (2000). E-customer loyalty-applying the traditional rules of business for online success. European Business Journal , 12 (4), 173. Schneider, Daniel, et al. "Measuring customer satisfaction and loyalty: Improving the ‘Net- Promoter’score." Poster presented at the Annual Meeting of the American Association for Public Opinion Research, New Orleans, Louisiana . 2008.

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