Loyalty Hasn't Disappeared

Professor Byron Sharp, Director, Ehrenberg-Bass Institute
University of South Australia writes:

Franz
Last week the New York Times reported that American's loyalty to car brands has plummeted. I've written on this myth before (see short article).

People fall for such myths because they don't know about the laws that govern loyalty metrics. Repeat-buying levels vary little between rival brands. The Double Jeopardy law says they can't plummet, not unless Detroit suffered a catastrophic drop in market-share – it has been declining but not a free-fall drop.

Actually repeat-rates in the US have been steadily around 50% for many years, that's amazing loyalty (the sort we see in every product category). Detroit has been losing market share but the main cause is a lack of customer acquisition.

Byron

For the past ten years some of the world's leading marketers (like Unilever, Mars, Coca-Cola, and British Airways), have been funding a special
research program to answer fundamental questions about buyer behaviour and how brands grow. See www.MarketingScience.info for more information.