Customers may be looking for more than just useful features when they invest in a branded product – they may be seeking a soul-mate! When a radical new product or brand appears on the market it can threaten a company’s relationship with existing customers who may be tempted to change brands. So what makes them consider switching and how does a brand ensure their customers’ loyalty when such disruptions to the market occur?
A study by Son K. Lam, Michael Ahearne, Ye Hu and Niels Schillewaert challenges the mainstream view of brand switching as solely an attempt by customers to obtain a more useful product and suggests subtler mechanisms linked to a person’s identity are also at play.
“Resistance to Brand Switching When a Radically New Brand Is Introduced: A Social Identity Theory Perspective” examines how cellphone users responded to the launch of the iPhone in Spain and reveals that customers may switch brands to feel more upwardly mobile.
The study sheds light on how brands can sustain the loyalty of customers when a market is disrupted by highlighting how important it is to build a strong sense of belonging – and win the identity war.
Market disruptions that can change how customers weigh up brands – such as aggressive sales promotions, industry crises, product recalls, negative publicity and radical innovations by competitors – are becoming more common. Building a strong brand is crucial to survival and studies suggest that satisfaction is not always enough when predicting whether a customer will remain loyal and they will also calculate how useful a product is.
But such a practical way of interpreting loyalty does not fully capture psychological factors that might motivate customers: a brand can also offer a potent source of identity.
Our possessions have long been seen as expressions of our identity to the extent that over time consumers may come to believe that they share the attributes that define them as individuals with a company. This has important implications for brands that want to maintain relationships with their customers when a market is disrupted.
Lam, Ahearne, Hu and Schillewaert advance the notion of customer-brand identification – a consumer’s sense that he or she belongs with a particular brand. This idea challenges the assumption that customers stay loyal or switch brands only to maximize the useful features of a product, and begs the question as to whether there is a mechanism that can guarantee loyalty when a new product comes along.
Marketing researchers commonly explain the way a consumer switches between brands as a choice based on a rival product’s attributes. However, they have also suggested that softer processes – such as a customer’s attitudes and perceptions – play a role.
People derive their identity from their links to social groups, distinguishing themselves from others by imagining they belong to an “in-group”. When an identity is threatened, in-group members may seek to be upwardly mobile by switching to a brand they once disliked after revising their view of its identity. They may compete with other groups – often encouraged by rival companies themselves – to boost their status by, say, spreading negative word of mouth about competitors. Or they may be inventive, comparing their in-group with outsiders according to new criteria in order to see it in a new, positive light.
The researchers proposed that when a radically new brand is introduced customers compare both a new product’s usefulness as well as the identity it offers them. Judgements influenced by identity persist and by focusing on selective criteria customers may make their original brand’s identity seem more attractive while downplaying the allure of the newcomer. So the researchers predicted that the greater the relative merits of the original brand in terms of identity, the lower the likelihood a customer will switch.
They tested their ideas longitudinally by surveying 679 consumers, member of a panel of online research company InSites Consulting in Spain before and after the launch of the iPhone – a significant market disruption. They found that both the extent to which a customer perceives their current brand’s identity as being more relevant to their own than another brand, and the degree to which they believe their current brand is more useful, inhibit switching – but these effects vary over time, with identity restraining the desire to change more than practicality.
The work of Lam, Ahearne, Hu and Schillewaert has major implications for marketing theory:
The study provides valuable insights for brand and customer-relationship managers by suggesting that:
Lam S. Ahearne M. Hu Y. Schillewaert N. 2010. Resistance to brand switching when a radically new brand is introduced: a social identity theory perspective. Journal of Marketing. 74
Published on 29/07/2011
