What is loyalty?

For many marketers, Loyalty is the holy grail. We've all heard it for a long time--at work, in business school, in publications about marketing. Yet, somewhere along the way we as marketers seem to have lost sight of just what loyalty is and what it should mean to a brand.


What does 'loyal' mean? Most sources I found defined it as something along the lines of "giving or showing firm and constant support or allegiance to a person or institution." That's pretty clear; so far, so good.


Most marketing academics define 'loyalty' by a customer or consumer's share of requirements (SOR). That is, if I buy 10 bottles of soda a week, then that is 100% of my requirements. Each category and brand has its own idea of what share of requirements defines a loyal user. If I buy Coca-Cola 5 out of those 10 bottles, then Coke provides an 50% SOR. That's pretty darned loyal, if you include all possible carbonated soft drinks in the consideration set. However, if you look at only full-calorie colas as the consideration set, then it's about what you might expect given that there's really just Coke and Pepsi. RC Cola has, sadly, all but disappeared.


I've always looked at the consumer buying process as having four phases:
Awareness - where the consumer takes notice of your brand in the grocery aisle, or via advertising or word-of-mouth.
Trial - where the consumer finds your product or brand's benefits compelling enough to spend some of their money and try it. Coupons or similar incentives work well here, especially if their already buying a competitor brand.
Repeat - where their first trial experience was a good one, and they will try you again now that they have some expectation of what your product will deliver.
Loyalty - where the consumer has replaced their previous preferred brand(s) in the category with yours, and you provide the largest SOR.


So, am I loyal because I fly Delta nearly every flight I can? Or is it simply that they have >80% share of the Minneapolis-St. Paul market with non-stop flights to most major cities?


Am I loyal because I go to Caribou more than Starbucks, or is it that there's a Caribou location on the right-hand side of my morning commute and it has a drive-through?


Am I loyal because I always buy adidas Response training shoes, or do I have tough-to-fit feet and I find it best to go with what I know?


None of these is easy to answer. In each case, the share of requirements test would say that yes, I'm loyal to Delta, Caribou and adidas. However, it doesn't measure any kind of emotional attachment I might have to any of them. Some brands carry that extreme emotional connection for some consumers--think about Harley-Davidson, Mountain Dew, even Slim Jim, where people have had the brand's logo tatooed on their bodies. That's loyalty. That's commitment.


It's easy to sign up for the frequency program of every airline, hotel and car company you travel with, or every retailer you shop. They all seem to be very willing to give up some pretty hefty points for sign-up and for credit cards. But will that grab you, pull you in and lead you to buy more from them, more often? Or will they just be more cards in your wallet, or bar-code fobs on your key chain?