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Should One Invest In Brand Relationships to Drive Customer Loyalty?

“establishing a relationship with consumers is a game changer for brands”, according to branding expert Tim Halloran.

… establishing a relationship with consumers is a game changer for brands

Customer brand loyalty is one of the most important concepts in marketing. Over the last 25 years, much research has shown that different ways consumers feel toward brands – ranging from brand attachment, love, trust, identification, to self-brand connection – help improve customer brand loyalty. However, hardly anyone can agree on what types of so-called relationships with a brand are most effective in influencing customer brand loyalty both overall and in specific contexts. Surprisingly, existing published materials have not offered much understanding of the effectiveness of consumer-brand relationships as a marketing tactic. To add to the complication, companies and brands spend billions of dollars to encourage consumer-brand relationships, yet many of them do so without a good understanding of their activities, according to Professor Avery of Harvard Business School and her colleagues.

My co-authors and I addressed this gap in our newly published research. To try and understand how well different types of brand relationships drive loyalty and to help companies improve the effectiveness of their relationship-building investments, we conducted a study of the link between five consumer-brand relationship types and customer brand loyalty. The large-scale 46-country (including a series of Asian data) study reveals that on average, a 1% increase in brand relationship investment is associated with a .44% improvement in customer brand loyalty.

The study also identifies which of five types of consumer-brand relationships are relatively better at boosting loyalty. It reveals that brand love and attachment are the most useful strategies marketers can adopt, with brand love being affection and passion a  consumer has for a particular brand while brand attachment standing for an emotional bond toward a specific brand. For example, consider McDonald’s and its classic “I’m lovin it” campaign or Singapore Airlines and its iconic and “most-loved” brand status. Both have successfully emphasized an emotional connection of target customers with the brand.

The study results further show under what additional conditions brand relationships increase loyalty, providing important information about when and where such relationships work relatively more effective. For example, marketers should expect greater return on their brand relationship investments in more recent (vs. earlier) years, for non-status (vs. status) and publicly (vs. privately) consumed brands as well as for attitudinal (vs. behavioural) customer brand loyalty. While prior research has shown that brand relationships positively influence customer brand loyalty, most such studies use a single sample and context and thus cannot methodically investigate factors that influence the effectiveness of brand relationships as a marketing tool.

Our findings have implications for marketing; they show the importance of investing in brand relationships. With the exception of price as a marketing instrument, brand relationships possess one of the highest effectiveness among different marketing tactics. Thus in brand relationships, marketers have a powerful tool to adopt when examining its influence on marketing value and consumer behaviour. This builds on earlier work by Professors Edeling and Fischer at the University of Cologne, reinforcing their findings that brand assets are critical drivers of firm value.

The study results should be helpful for brand managers who want to optimise their marketing efforts. Our study confirms that brand relationships are a practical tool to boost customer brand loyalty. We also reveal a powerful effect of time, suggesting an increasing importance of consumer-brand relationship investments. Brand relationships are already an important influence on loyalty and we forecast this influence will likely continue to grow in the coming years.

As marketing strategists, Bonchek and France said, “If the first three waves were brand as object, idea, and experience, the next wave will be brand as relationships”. After all, “establishing a relationship with consumers is a game changer for brands”, according to branding expert Tim Halloran.

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Written By

Dr. Mansur Khamitov (Ph.D., MBA) is an assistant professor of marketing at Nanyang Business School, NTU Singapore. His research on the subject was done in collaboration with Xin (Shane) Wang and Matthew Thomson, Western University. You may read their research published in the Journal of Consumer Research here.

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