Small firms not outgunned in the brand loyalty stakes

Start-ups can compete with big brands providing they give consumers reasons to switch, according to a leading branding consultant.

Erminio Putigano, managing director of FutureBrand Australia, says with so much information available to consumers, brand loyalty is waning.

“Consumers are becoming less loyal and more savvy as the availability of information – particularly online – enables them to make more informed choices,” Putigano says.

“It doesn’t matter if you are big or small. If you come up with a good idea that breaks the status quo, and people are easily able to understand the benefits of it, they’re going to switch straight away.”

His comments come in light of new research from the University of Southern California, which claims consumers suffer separation anxiety if forced to purchase a competing product.

The study was conducted over several years, during which time academics analysed consumers’ responses to three different brands – the Apple iPod, an oatmeal brand and a local university.

One part of the study required 108 undergraduate marketing students to report their thoughts and feelings towards the Apple iPod.

The study found that consumers who are highly attached to a brand are more likely to pay more, defend the brand, criticise competitors and devote more time to the product, including boasting about it via social media.

Debbie MacInnis, vice dean for research and strategy at the University of Southern California, says despite the findings, small businesses are not at a disadvantage when it comes to brand loyalty.

“What matters more is not the size of the company but rather consumers’ relationship with the brand, the personal experiences they have with it, and the extent to which it can be trusted to consistently satisfy their needs,” MacInnis says.

“We see this all the time with consumers who eschew larger brand establishments like Starbucks in favour of local coffeehouses with whom they feel a personal sense of identification.”

“The same is true for consumers’ attachments to niche brands that serve a smaller and more specialised market.”

“True, it may be more difficult for smaller brands to gain the attention of consumers. But once attention is gained and a relationship begins, there is no reason to expect that a brand relationship with a smaller brand would be more difficult to establish than a larger one.”