More on Brand Keys Loyalty Index

This is the third installment of analysis of a report that was released recently.

On Monday, I talked about the Coffee Battle between Starbucks, McDonalds and Dunkin Donuts. (READ MORE).

Yesterday, I presented a list of #1's in each category surveyed. (READ MORE).

Before we look at the report I have for you today, I want to share with you why this matters.

A few years ago, my company hired TOMA Research, and they did a Top Of Mind Awareness (T.O.M.A.) study in Fort Wayne to measure where companies ranked in our community. This was eye opening to the hundreds of business owners that came to the seminar to discover their results. The TOMA study was similar to the Brand Study that Brand Keys did.

You need to be distinguishable among the multitudes of choices your customers have. I recall last summer when the owner of a local car repair chain was complaining that there are now more than 20 local radio stations to chose from. I asked him how many local auto repair shops there were in town and handed him the phone book. (There are a few hundred).

This is where your BRAND comes in. Don't just be another one, Be You and Brand You.

Now let's look at this third installment:

Customer Loyalty Engagement Index Underscores Commoditization

The main takeaway from the just-released results of the 2008 Brand Keys Customer Loyalty Engagement Index (CLEI) is that brands are more indistinguishable than ever, according to Robert Passikoff.

"Ties between brands used to be the exception, but there are more ties than there have ever been. This speaks to commoditization," says Passikoff, founder of the Brand Keys consultancy and creator of the CLEI system. "Many brands are now just placeholders. It's nice to be number one, but people don't perceive any differences between number one and number two in many cases. People know the brand names, but they don't know what the brands stand for."

Brand Keys has used CLEI annually since 1997 to measure U.S. customers' relationships with brands. The strength of that bond is a leading indicator that has been shown to accurately predict consumers' behavior in the marketplace and the brand's sales and profitability six to eight months out, according to the firm. This year's CLEI ranks 382 brands across 57 categories.

Two brands tied for first place in 17 categories: airlines (JetBlue/Southwest); OTC allergy medicines (Benadryl/Tylenol); athletic footwear (Air Jordan/New Balance); banks (Wachovia/Washington Mutual); bottled water (Aquafina/Fiji); mass merchandiser cosmetics (Mary Kay/Maybelline); diapers (Wal-Mart White Cloud/Playskool); gasoline (BP/Sunoco); LCD HDTV (Samsung/Panasonic); plasma HDTV (Pioneer/Panasonic); upscale hotels (Hyatt/Embassy Suites); long-distance phone service (AT&T/Verizon); online travel (Expedia/Orbitz); pizza (Domino's/Papa John's); quick-serve restaurants (McDonald's/Subway); home improvement stores (Lowe's/True Value); and wireless phone service (Verizon/AT&T).

There were also 52 instances of ties for other places within the categories. Lack of perceived differentiation seems particularly common in electronic categories. Among computers, Apple and Dell are clearly No. 1 and No. 2, but are followed by a series of tied brands (Gateway/HP tied for third, Fujitsu/Toshiba tied for fourth, IBM/Lenovo/Sony VAIO tied for fifth, and NEC/Panasonic/Compaq tied for sixth).

Among DVD players, Samsung and Sony are 1 and 2, while Panasonic, Pioneer and Toshiba are tied for third, and JVC and Sharp for fourth.

Among HDTVs, the first-place ties are just the beginning. In LCDs, RCA and Toshiba are tied for second, Sharp is No. 3, and JVC/Hitachi are tied for fourth. In plasma screens, Samsung, LG and Vizio hold the second, third and fourth places, followed by ties for fifth (Sony/Toshiba) and sixth (Dell/Philips/Hitachi).

Brand Keys added the mass-merchandise cosmetics and luxury cosmetics categories this year. In the latter category, Estee Lauder took first place, followed by Clinique/Lancome, Chanel and Shiseido.

Aside from the 13 brands added through the new cosmetics categories, 14 brands appeared in the rankings for the first time: Northwest Airlines, Vitamin Water and Volvic (bottled water), Wal-Mart White Cloud, Luv's, JVC and Sharp (within DVD players), National Grid (energy provider), Kayak (online travel), American Apparel, Radio Shack (electronics stores), Search (search engines) and McDonald's, which appeared for the first time in the coffee category.

"McDonald's got the coffee right and is now parlaying it into whole new lines of business," Passikoff notes. Meanwhile, Starbuck's--which lost first place to Dunkin' Donuts in the coffee category last year--is now No. 3, below both Dunkin' and McDonald's.

Other highlights:

* Toyota remained the No. 1 auto brand, as it has been since the study began.

* Air Jordan moved up significantly, apparently on the strength of its introduction of XX3 White/Titanium-University Blue, the 23rd iteration of the sneakers, being sold at 23 dealers for $230 a pair, all to tie in with Michael Jordan's famous number 23.

* Sam Adams is now the No. 1 regular (non-light) beer, having risen up the ranks on the strength of solid advertising that conveys the brand's authentic production-"a big deal to beer drinkers," observes Passikoff.

* W Hotels ranked No. 1 among luxury hotels for the first time. "They've done a lot of branding work on service and value, which are the key drivers for that category," he points out.

For the CLEI, Brand Keys interviews a representative sample of U.S. consumers using screening techniques to identify brand customers (most of whom are in the top 20% of the customer base). The interviews employ a combination of proprietary psychological assessments and statistical analyses to gauge emotional and rational elements of the bond with the brand.

(Source: Marketing Daily, 2/20/08)

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