- Introduction
- Market Share
- Relative Market Share and Market Concentration
- Brand Development Index and Category Development Index
- Penetration
- Share of Requirements
- Heavy Usage Index
- Awareness, Attitudes, and Usage (AAU): Metrics of the Hierarchy of Effects
- Customer Satisfaction and Willingness to Recommend
- Willingness to Search
This chapter is from the book
This chapter is from the book
This chapter is from the book
2.9 Willingness to Search
Purpose: To assess the commitment of a firm's or a brand's customer base.
Brand or company loyalty is a key marketing asset. Marketers evaluate aspects of it through a number of metrics, including repurchase rate, share of requirements, willingness to pay a price premium, and other AAU measures. Perhaps the most fundamental test of loyalty, however, can be captured in a simple question: When faced with a situation in which a brand is not available, will its customers search further or substitute the best available option?
When a brand enjoys loyalty at this level, its provider can generate powerful leverage in trade negotiations. Often, such loyalty will also give providers time to respond to a competitive threat. Customers will stay with them while they address the threat.
Loyalty is grounded in a number of factors, including
- Satisfied and influential customers who are willing to recommend the brand.
- Hidden values or emotional benefits, which are effectively communicated.
- A strong image for the product, the user, or the usage experience.
Purchase-based loyalty metrics are also affected by whether a product is broadly and conveniently available for purchase, and whether customers enjoy other options in its category.
Construction
Willingness to Search: The likelihood that customers will settle for a second-choice product if their first choice is not available. Also called "accept no substitutes."
Willingness to search represents the percentage of customers who are willing to leave a store without a product if their favorite brand is unavailable. Those willing to substitute constitute the balance of the population.
Data Sources, Complications, and Cautions
Loyalty has multiple dimensions. Consumers who are loyal to a brand in the sense of rarely switching may or may not be willing to pay a price premium for that brand or recommend it to their friends. Behavioral loyalty may also be difficult to distinguish from inertia or habit. When asked about loyalty, consumers often don't know what they will do in new circumstances. They may not have accurate recall about past behavior, especially in regard to items with which they feel relatively low involvement.
Furthermore, different products generate different levels of loyalty. Few customers will be as loyal to a brand of matches, for example, as to a brand of baby formula. Consequently, marketers should exercise caution in comparing loyalty rates across products. Rather, they should look for category-specific norms.
Degrees of loyalty also differ between demographic groups. Older consumers have been shown to demonstrate the highest loyalty rates.
Even with these complexities, however, customer loyalty remains one of the most important metrics to monitor. Marketers should understand the worth of their brands in the eyes of the customer––and of the retailer.