Brands Will Have Access to 25 Years of Key Loyalty Indicators (KLIs) That Are Predictive of Consumer Behavior and Economic Outcomes

Brand Keys, the global leader in brand loyalty and emotional customer engagement research announced the pending release of the world’s largest and most-continuous database of predictive brand loyalty metrics in January 2022.

“After 25 years conducting the Customer Loyalty and Engagement Index, it seemed an apt time to allow brands access to where brand loyalty has come from and, more importantly, where it’s going,” said Robert Passikoff, Brand Keys founder and president. “Loyalty – how to earn it, grow it, and keep it – will be one of the most important performance indicators that brands measure in the next decade.”

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The Economics of Loyalty
In 2021, adjusted for a new century and a new generation of consumers, loyalty matters even more:

 It costs 13 to 18 times more to recruit a new customer than to keep an existing one (+60% vs. 1997).
 An increase in loyalty of 5% can result in a boost in lifetime profits per customer of as much as 78% (+22% vs. 1997).
 An increase in customer loyalty of only 2% is equivalent to a 15% across-the-board cost reduction program (+50% vs. 1997).

World’s Largest Brand Loyalty Database: 4.3 Million Evaluations
In 1984, recognizing the importance of brand loyalty, Brand Keys was established to develop the first predictive loyalty metrics. The first Loyalty Index, conducted in 1997, has been done annually ever since. The 2022 database of 4.3 million customer assessments will include loyalty and engagement analytics for 1,624 brands in 142 categories. These brand assessments have been independently-validated and correlate highly (0.80+) with positive, in-market consumer behavior.

Emotional vs. Rational Decision-Making and Three Key Loyalty Indicators (KLIs):
The consumer decision-making process has become more emotional than rational over the past 25 years. In 1997, the process was 60% rational and 40% emotional. Twenty years later the ratio shifted to become 80% emotional and 20% rational. “When we measure ‘emotional,’ we’re talking about psychological properties, not just imagery. And, while there are still categories where rational thought dominates, there are fewer-and-fewer each year,” noted Passikoff.

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Shifts in the consumer decision-making process have identified three, critical KLIs:

1. Emotional vs. Rational: Is what drives brand engagement, behavior, and loyalty in your category more – or less – emotional or rational? What should your brand leverage to increase loyalty?

2. Expectations: Consumers are unwilling to settle for what exists as expectations have increased faster than brands can keep up. What’s the gap between what consumers really desire (their Ideal and metaphorical yardstick) and what they see – and, more critically, feel – your brand delivers? That gap identifies opportunities to build loyalty. Brands that best meet consumer expectations always see increased levels of positive consumer behavior and profitability.

3. Value Ownership: What particular value(s) does – or can – your brand own? Value-ownership today is a brand-state that goes well beyond 20th century differentiation to define category leaders.

COVID Effects. Category Shifts. Brand “Strobing.” How Consumers Shop.
“An example of pre-COVID expectations for ‘Airline Safety’ (a critical driver of loyalty) could be summarized as the plane takes off, the plane doesn’t fall out the sky, the plane lands, and if it’s on-time and security didn’t let anyone bring on a gun that was a bonus,” noted Passikoff. Add COVID-19 into the airline safety equation and loyalty metrics can identify which drivers will shift in the category and how brands can most effectively deal with those shifts. The ability to anticipate and meet expectations are key determinants of consumer loyalty, marketing success, and brand profitability.

“Categories – like consumers – have evolved over the years, i.e., Brand Keys tracked SLR Cameras until cameras were integrated into mobile phones, and mobile phones until they became smartphones,” noted Passikoff. “MySpace, the first social media site, was established 2004 so we added the Social Networking category. TikTok appeared and was included in 2016. We’ll add Meta when it becomes a reality.” The Brand Keys data base has been updated and enhanced every year since 1997.

Brands “strobe” in and out of categories. Brand Keys does not use a pre-determined brand list. A brand is only evaluated if a statistically reliable sample of consumer-respondents identify as customers. The pattern of list appearances, disappearances, and re-appearances can be extraordinarily informative,” said Passikoff.

How consumers “shop” has not remained static either. The order of category loyalty drivers – describing how consumers view, compare, buy, and remain loyal – change annually. So do the attributes, benefits, and values that make up the components of each loyalty driver and the percentage-contribution that each value makes to engagement and loyalty. Understanding how these changes have occurred and how and when they will occur have strategic and tactical benefits to brand planners, advertising and communication development, and consumer outreach and experience.

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