Brand Keys 2014 Customer Loyalty Index
Finds Consumers Emotional Expectations for Products, Services at 20-Year High
Brand Keys 2014 Customer Loyalty Index
Finds Consumers Emotional Expectations for Products, Services at 20-Year High
Apple Back On Top For Tablets and Smartphones-
JetBlue, Nike, Twitter, Victoria's Secret and Panera Claim Category Leaders
NEW YORK, NY (FEBRUARY 10, 2014) – The interaction of mobile and socially networked consumer empowerment, along with perpetual price promotions and discounting have reached saturation to produce the highest level of emotional consumer expectations for products and services in two decades – up nearly 30% while brands' ability to meet consumers’ expectations, on average, has increased only 6% according to the 18th annual Brand Keys 2014 Customer Loyalty Engagement Index® (CLEI), conducted by New York-based brand engagement and customer loyalty research consultancy Brand Keys. The Brand Keys 2014 CLEI assessment included 64 product categories and 555 brands.
“Brands that are able to meet – sometimes even exceed – consumers’ emotional and rational expectations have more loyal customers, higher engagement power, greater profitability and market power,” said Robert Passikoff, president, Brand Keys. “The difficult part, of course, is accurately measuring consumer expectations. “
Top Brands – Apple, Hyundai, Ford, Domino’s, Dunkin’...
Brands appearing at the top of the 2014 Brand Keys survey, include: Apple (displaced in the 2013 CLEI in the Tablet and Smartphone categories, has smartly come back this year). Brands like AT&T, Hyundai and Ford, Domino’s and Dunkin’, Google and the NFL, all maintained #1 positions in their respective categories.
Brands that appeared in their categories for the first time include: Panera, Chipolte, USAA and Twitter. “As years of research have shown, consumers make purchasing decisions based on a synthesis of rational and emotional values related to the product category. But today, meaningful differentiation is based more on the ability to leverage emotional category-specific values by better meeting expectations,” noted Passikoff.
“Consumers do not buy computers the way they buy cars, so you can’t trade away category specificity for cross-category generalities. Actually many brands do, but they usually end up with averages, which are poor indicators of how people will behave – ‘behave’ being the operative word if you’re looking for success in today’s marketing world,” said Passikoff.
Methodology
For the Brand Keys 2014 survey, 32,000 consumers, 18 to 65 years of age drawn from the nine US Census Regions, self-selected the categories in which they are consumers, and the brands for which they are customers (top-20%). Seventy percent (70%) were interviewed by phone, twenty-five percent (25%) via face-to-face interviews (to include cell phone-only households), and 5% participated online.
Assessments are based on an independently-validated research technique that fuses rational and emotional aspects of the categories to identify the behavioral drivers for each category-specific Ideal, and identifies the attributes, benefits, and values that form the components of each driver. The Ideal describes a precise path-to-purchase, describing how the consumer will view the category, how they will compare brands and, ultimately how they will engage with the brand, buy, and remain loyal. Then the assessments measure how well brands meet expectations consumers hold for each driver that makes up the Ideal for a specific category.
The proprietary research technique combines psychological inquiry with higher-order statistical analyses to deliver a verified test/re-test reliability of 0.93, with results generalizable at the 95% confidence level. It has been successfully used in B2B and B2C categories in 35 countries around the world.
Seven New, Highly Engaging Categories Arrive
Seven new categories -fast Casual Dining, Online Music, Instant Messaging Apps, Online Video Streaming, Online Payment Services, Headphones, and Insurance, now examined by Home and Life individually to better mirror consumer behavior – were added to the 2014 CLEI survey. “We’ve seen high consumer interest and strong brand growth in these categories, “ said Passikoff, “ We included them to replace older categories whose commoditized brands had lost any real differentiation and had basically become interchangeable, and categories with few national providers.”
Below are the brands with highest levels of consumer engagement vis à vis expectations in their respective categories. The percentages indicate the degree to which a brand met expectations versus a consumer-generated, Category-specific Ideal (100%).
1. Airline: JetBlue (81%)
2. Allergy Medications (OTC): Claritin (88%)
3. Athletic Footwear: Nike (91%)
4. Automotive: Ford/Hyundai (93%)
5. Bank: JP Morgan Chase (90%)
6. Beer (Light): Coors Light/ Sam Adams Light (95%)
7. Beer (Regular): Coors/Sam Adams (90%)
8. Breakfast Cereal: Cheerios (93%)
9. Car Insurance: USAA (92%)
10. Car Rental: AVIS (90%)
11. Casual/ Fast-Casual Dining: Panera (90%)
12. Coffee: Dunkin’ Donuts (96%)
13. Computer (Laptops): Apple (95%)
14. Cosmetics (Luxury): Lancôme (93%)
15. Cosmetics: L’Oreal (84%)
16. Credit Card: Discover / American Express (90%)
17. Diapers: Pampers (96%)
18. E-Readers: Kindle (96%)
19. Evening News Shows: NBC (92%)
20. Flat Screen TV: Samsung (98%)
21. Gasoline: Shell (88%)
22. Headphones: Beats by Dr. Dre /Sony (91%)
23. Hotel (Luxury): Ritz-Carlton (93%)
24. Hotel (Upscale): Hyatt (87%)
25. Hotel (Midscale): Holiday Inn (84%)
26. Hotel (Economy): Super 8 (83%)
27. Insurance (Life): New York Life (82%)
28. Insurance (Home): USAA (84%)
29. Instant Messaging Apps: WhatsApp (90%)
30. Major League Gaming Video: Call of Duty – Ghosts (92%)
31. Major League Sports: National Football League (94%)
32. MFP Office Copier: HP/Konica Minolta (83%)
33. Morning News Show: Good Morning, America (ABC) (87%)
34. Mutual Funds: T. Rowe Price / Vanguard (80%)
35. Natural Food Stores: Whole Foods (90%)
36. Online Brokerage: Options Xpress (86%)
37. Online Music: Pandora (90%)
38. Online Payment Services: PayPal (90%)
39. Online Retailers: Amazon (93%)
40. Online Travel Sites: Expedia (87%)
41. Online Video Streaming: Netflix / Amazon (88%)
42. Packaged Coffee: Dunkin’ (96%)
43. Pain Reliever (OTC): Aleve (90%)
44. Parcel Delivery: UPS (90%)
45. Pet Food (Canned) for Cats: Purina (94%)
46. Pet Food (Canned) for Dogs: Science Diet (91%)
47. Pizza: Domino’s (89%)
48. Printers: Canon (94%)
49. Quick-Serve Restaurants: Subway (93%)
50. Retail Store (Apparel): Victoria’s Secret (81%)
51. Retail Store (Department): Macy’s (80%)
52. Retail Store (Discount): Walmart (93%)
53. Retail Store (Home Improvement): Home Depot (87%)
54. Retail Store (Price Clubs): Sam’s Club (94%)
55. Retail Store (Sporting/Recreational Goods): Dick’s (83%)
56. Search Engine: Google (85%)
57. Smartphones: Apple (81%)
58. Social Networking Sites: Facebook /Twitter (77%)
59. Soft Drinks (Diet): Diet Coke (89%)
60. Soft Drink (Regular): Coke (88%)
61. Tablets: Amazon/Apple (90%)
62. Toothpaste: Colgate (94%)
63. Vodka: Grey Goose (90%)
64. Wireless Phone Service: AT&T (80%)
The complete listing of the 64 category rankings can be found at:
brandkeys.com/syndicated-studies/customer-loyalty-engagement-index
Top 10 Highest Expectation Categories
Assessments from the 2014 Customer Loyalty Engagement Index found that overall consumer expectations increased by 30%, while individual brands have only grown 6%. “Even without a statistical app, it’s clear that the gap between what consumers expect and what brands deliver is growing larger,” said Passikoff.
Categories that are more emotionally-driven are likely to have higher expectations that increase faster. More rational categories have lower expectations and move more slowly, “the penalty for process re-engineering and the delivery of same-as-same-as products and services, viewed as identical except for the name on the package or the website,” noted Passikoff.
This year’s CLEI survey identified 12 categories as having the highest overall consumer expectations and, following in parentheses, the category driver(s) where consumers have the highest expectations:
1. Instant Messaging Apps (Comprehensive, Sophisticated, Most Up-To-Date Features)
2. Social Networking Sites (Multi-Functional Connectivity)
3. Smartphones (Apps/Camera/AV/Multimedia Technology) and
Tablets (Brand Value & Support)
4. Natural Food Stores (Wide Range of Healthy, Sustainable Organic Foods)
5. Online Video Streaming
6. Wireless Phone & Data Services (Wide Range of Original and Current Entertainment + Extensive Library)
7. Mutual Funds (Fund Success)
8. Luxury Hotels (Brand Reputation & 5-star Ratings) and
Luxury Cosmetics (Makes Me Feel Good and Look Good)
9. Online Retailers (Trust and Security)
10. Retail Apparel Stores (Brand Buzz)
“Expectations grow most of the time,” said Passikoff. “But the rate of growth varies by category. So expectations about technology grow faster than breakfast cereal. What marketers need is the answer to the question, how high is ‘up’ when it comes to expectations in my category?”
Being attentive to the engagement expectation gap presents brands with a real opportunity. “If you can do something that increases a brand’s engagement level you’ll see more positive consumer behavior in the marketplace. Always,” noted Passikoff. “And brands that are assessed as better meeting expectations held for the Ideal have larger market shares and are always more profitable than the competition. Always.”
“Brand Keys loyalty-engagement metrics use a well-documented and validated approach, a metric brands should consider adding to their marketing toolboxes because having consumers ‘Rate the Ideal’ via importance scales may make for an unobjectionable cable reality TV concept, but also makes for a highly inaccurate brand engagement yardstick in today’s marketplace.”
February 10, 2014