It won’t surprise you to hear that we love loyalty programs. When done well, they can retain your customers (especially your best customers) AND drive incremental revenue as members strive to achieve status and higher levels of rewards.
Loyalty programs, however, are but one tool in a company’s arsenal for attracting and keeping customers. There is a more powerful tool that can transcend the best loyalty program, the best locations, and even the most competitive pricing: your BRAND and the TRUST that goes along with it.
So what is brand trust really about? It can actually take many forms, some of which are more tangible, and some of which are intangible but equally important. Brands can earn the trust of their customers by having great quality (real or perceived); great value; a reputation for advocacy of important causes; a heritage or nostalgia; or a unique cachet.
Whatever the source of the trust, brands must understand what that source is and must protect it vigilantly. In recent years we have seen several brands falter because they did not understand that source, or because they ignored it. Consider these examples:
- Talenti. This beloved brand has long had passionate customers who loved the distinct taste, consistency and even the packaging of its rich gelato. Those characteristics signaled Quality to its customers. Talenti was acquired by a CPG conglomerate, which proceeded to change the formulation and the packaging. BOOM – the passionate fans felt betrayed, and fled the brand in droves.
- Cracker Barrel. To many people, Cracker Barrel represented nostalgia for a simpler time – comfort food in an old-timey setting. Sure, it was a bit kitschy, but people knew what they were getting and the kitsch was part of the product. Not wrongly, Cracker Barrel wanted to broaden its appeal to a younger audience, so it came up with a new logo and décor that stripped away portions of that nostalgia. Uproar ensued, amplified by today’s political and cultural polarization. The brand had lost touch with what made it special and customers felt betrayed. The brand’s reputation suffered greatly. The old logo was restored, amid senior executive turnover.
- Bud Light. Speaking of uproar, Bud Light generated a firestorm of protest when it worked with a trans-gender influencer. There are several categories where brands rely on customers feeling that the product is representative of who they are – a badge of identity. Alcoholic beverages is one of those categories, as are automotive, cosmetics and apparel. When Bud Light worked with the influencer, it went outside of what many customers considered to be their identity. Once again, the perceived betrayal was amplified by today’s media environment, and Bud Light lost a great deal of market share; some of that share loss is permanent.
- Taylor Farms. The missteps of the brands above were damaging to brand trust, and therefore costly. But they were not damaging to actual humans. The recent outbreak of cyclosporiasis, traced to lettuce grown by Taylor Farms, has resulted in over 15,000 confirmed cases of intestinal illness with very nasty symptoms. There have also been contaminations of other types of produce, resulting in a wide range of product recalls. As one would expect, sales of – and trust in – Taylor Farms plummeted. It is hard to imagine that the brand’s reputation will recover any time soon, or ever. But such a breach of trust that actually endangers human health is, no pun intended, contagious. Concern about contamination has spread to many other brands and types of produce, affecting the entire agricultural industry. Some companies have taken proactive measures to reassure the public, and those may well be successful. But customers will remain skeptical. As they say, trust, once lost, is incredibly difficult to regain.
There are many other examples, including Target, Ben & Jerry’s and, going back in time, New Coke. And it’s important to note that though these missteps caused major damage to their brands’ reputations they have not been fatal. But whatever the source of the trust, brands MUST understand why customers love and trust their brands. Having the trust of customers is a superpower for a brand, and that superpower must be closely protected. The best loyalty program in the world cannot restore trust if a brand has squandered it.