Some companies imagine that they can change their strategy, change their CEO, change their advertising agency, refashion their products and still expect the brand to perform—regardless of what the original brand reputation was built on and what the brand stood for. Many brands have cheated the customer and they are paying a heavy price for it: customers are allowing themselves to be seduced by the competition and taking their business elsewhere.
The car industry is rife with cautionary tales. Take Mercedes, for example. A more established and credible brand is hard to come by. Yet Mercedes is losing the loyalty game because of the declining quality and reliability of its cars. "Even German taxi drivers no longer hail a Mercedes," reports the Financial Times, noting that the company’s reputation has been tarnished because the vehicles simply aren’t dependable any more.
Having long been at the top of the heap, Mercedes has crashed in the last ten years, tumbling from first to 28th place on a list of 35 car companies in a reliability survey conducted by J.D. Power, a market research firm. One might wonder whether the absorption of Chrysler became so distracting that the company lost its focus, or whether the extensive use of electronics has undermined the once surefire vehicles. Whatever the reasons for the brand’s decline, the problem clearly doesn’t lie with capricious consumers.
By contrast, Lexus' star is rising, due in large part to consistent quality of service, which is basic to building brand loyalty. German consumers rank Japanese cars higher than the Japanese themselves, with Toyota leading the pack.
Saab is another case in point. The original brand promise has evaporated as GM engages in mix 'n match manufacturing. Components are thrown together in a melting pot, making the Saab brand a shadow of its former self. GM is uncertain about the future of the Saab, and it shows. About all that's left of Saab in the new Saab 9.2 is the interior and the logo. But a badge on a piece of metal is not enough to create Saabness. And consider Saab's imminent entry into the SUV market with the 9-7X. In a recent article in the New York Times, journalist Danny Hakim pondered the question of whether this is Saab's first sport utility vehicle or "a Chevy TrailBlazer dressed up to look Swedish."
How can a brand defend its claim to distinctiveness when it is manufactured with the same engine and components that make up a host of other brands? Hakim points out that there is a pejorative term for this practice in the industry: "badge engineering," which is "only a little better than having a worker reach into a box at the end of a production line and randomly dole out brand emblems, or badges, to the same vehicle."
As a loyalist, I say give me a good Swedish car with brand character that will fit my personality, and I will buy it. Apparently I am not alone. Hakim cites Car and Driver magazine editor Csaba Csere to the effect that Saab's unique character was a main attraction for Saab owners. Brand managers in the car industry may learn from hard experience that customers will not tolerate being taken for a ride.
BMW is a company that has nurtured its loyalists. Staking its claim as the ultimate driving machine, it honors that commitment, and customers reward it with their trust. Admittedly, the new design has not been quite as successful as anticipated, but it is gaining momentum. And brand loyalty has stood BMW in good stead; some customers are hanging on to their current model until they can warm up to the new one.
The Cadillac and Oldsmobile brands were going nowhere until management decided that one brand—an American legend, an icon—should not die and the other should. Consequently, Cadillac was given a coronary by-pass, not just cosmetic surgery. Good design alone was not enough to revive the brand; more was needed to re-conquer lost ground. Price was not a way out either. The carmaker had to look at its roots, at the reasons for past success. It had to figure out what customers wanted in the next car before the customers themselves had an inkling. That takes leaders. It takes a dedicated team that considers the brand as a whole: its past, present and future; its style and its substance. The Cadillac brand character was carefully redefined with a sense of respect for everything it once represented.
Understanding the reasons a brand earned loyalty to begin with is a key to securing continued customer devotion. Companies fail to understand their customers at their own peril. Many clothing companies change their brand direction as often as I change my socks, in a bid to appeal to all audiences. Brand dilution often results: many shops carry what are essentially the same items with different labels.
Admittedly, fashion is fickle. But a good brand can endure by remaining true to its promise. Once again, it has to be more than a stamp on a piece of cloth. Good fit, cut, fabric, distinctiveness—these are the threads of brands that wear well.
Even a brand associated with a single individual can survive its originator. Chanel is an example of a brand that has outlasted its creator. Coco died a number of years ago, but, under the sage guidance of Karl Lagerfeld, who took over the Chanel design house in the early 80s, the Chanel brand has maintained its character, its value, and its inventiveness. Lagerfeld knew better than to remake the brand in his own image, and the company continues to bring forth new products that exude something of the original Chanel spirit.
Making a brand a lasting success is no mean feat. Like landing the Huygens craft on Titan, it takes a leader, it takes a finely tuned team, and it takes extensive research into alien environments. Above all, it takes time, dedication, and passion.
There's no quick fix for brands that are losing the loyalty race. And it won't do to blame the customer or the spirit of the times. Sometimes a brand that fails to command loyalty has simply outlived its purpose.