Love/Hate: Why Disliked Brands Prosper
Something brand owners strive for is that elusive magic of being loved by consumers. Brands like Apple, Google, Southwest Airlines, and others have earned enduring positive regard among consumers, and those companies outdo their peers in part because of the brand equity they have built. But what about brands people don’t like? Oddly, some of those survive quite nicely and even prosper.
A recent study by Consumer Reports used customer opinions to rank grocery chains, and Walmart came in almost dead last; only Pathmark was more reviled by shoppers. Consumers favored Wegmans, Trader Joe’s, Costco, and others. Nevertheless, the giant company is the biggest and busiest chain in the U.S., while the most-liked companies (Wegmans, Trader Joe’s, and Publix) have a much smaller footprint.
Airline brands are some of the most despised these days, with much of the damage self-inflicted. Cramped seating, fees for previously included services, fewer amenities, and a general lack of customer-orientation characterize the big airline brands today. This word cloud was created by Brian Solis and featured in his book, The End of Business As Usual: Rewire the Way You Work to Succeed in the Consumer Revolution, Brian Solis displays what people were saying about a major airline in social media:
You would think that any company with that kind of brand image would see rapidly declining sales and loss of market share. We don’t know WHICH major airline sparked this negative commentary, but all of the major lines are more or less holding their own.
I added my own tweet to American Airlines’ odiferous cloud just hours ago after being informed I couldn’t stand by for an American flight an hour earlier than the one I was booked on. Why not? I wasn’t a “gold” or “platinum” customer. That’s a heck of a way to build a brand… Why not empower the employee at the gate to fill an empty seat on a departing plane and, at the same time, make a weary business traveler happy? That concept isn’t in American’s DNA, it seems, and that’s how companies build tag clouds like the one shown above. (My contribution: “Why does @AmericanAir prefer to fly an empty seat vs letting a non-elite biz passenger standby? #FAIL #dumb”)
Pragmatism Over Preference
There’s a simple explanation for how brands people dislike endure: consumers will continue dealing with a brand they don’t like if other advantages are significant. Factors like price, convenience, and simple availability are big factors in many consumer decisions. People will tolerate bland stores and mediocre service at Walmart if they think their grocery bill will be ten or twenty bucks cheaper. An article by Allison Linn at msnbc.com offers quotes from readers:
“Love Trader Joe’s, Co-op, Whole Foods, etc. but low price comes first.”
“Luv/Hate with Walmart. We are disabled and on a fixed income — go to Walmart for prices but hate the store.”
Similarly, people will fly United, American, or Delta if better airlines can’t offer comparable availability and pricing. As a frequent business traveler, I’d fly JetBlue every trip if I could, but I can’t. They serve a limited number of cities with a limited number of flights. Even if I’m headed to a city they serve, timing or seat availability may prevent me from using them. Other times, their price is a lot higher. From a business standpoint, I can’t justify major differences in departure/arrival times (or massively higher prices) just to satisfy my brand preference. If an airline I prefer doesn’t have a reasonably competitive offering, I grit my teeth and book the flights on one of the poor-service carriers.
The Danger in Being Disliked
If companies like Walmart and United Airlines can survive for years while selling to customers who dislike them, should brands focus just on building advantages like lower prices and greater availability and not worry about brand perception? That’s not the lesson one should draw from this. Southwest Airlines, a brand with a very positive image among consumers, is the only carrier to stay profitable in recent years. The other lines have been plagued with one or more bankruptcies even as they held onto market share.
The biggest danger in ignoring brand perception (as the airlines seem to do, rarely responding to customer feedback in social media) is that brand loyalty will be zero if a viable competitor emerges. I may be stuck with American Air when I fly in Texas, but I don’t have to shop at Walmart. Individual stores vary, but the closest unit of Texas-oriented HEB offers more pleasant stores, more helpful people, better products, and very frequent sampling of food and wines. Going to this HEB is about as pleasant an experience as any grocery shopping trip can be, and I have no desire go to Walmart or even the more upscale (and equidistant) Randalls. Now, Whole Foods is opening a unit almost next to HEB; while I’ll likely shop there occasionally, I suspect HEB will continue to dominate my grocery spend.
Over time, most brands will need to meet competitive challenges, and a positive consumer image needs to be one of them. Nokia dominated the cell phone business, but that happened more because they had the products people wanted and great distribution. Few people had a warm spot in their heart for Nokia the way they might for, say, Apple. As other makers introduced products that were more relevant to consumer needs, Nokia had no brand momentum and got crushed.
In the short run, products and price can win the game. In the long run, a positive brand image can fend off competitors that emerge with comparable or even slightly better offers. Branding alone won’t carry a company forever, but it may keep it in the game long enough to regain its competitive edge. Conversely, consumer dislike for a brand is like cancer: it may not kill you right away, but unless you treat it your long-term prognosis is poor.
Brand Perception is a funny thing, and I think you nailed all of the points here.
Something I’d like to add to the conversation is that there is a certain amount of “programming” that happens to brand loyalists too though.
Let’s look at what’s going on with Google right now… While they’ve been the number one search engine for years (and still continue to be) they’re dramatically changing their core product, and pushing people into their social network. Though many people haven’t made the switch to Bing yet, my guess is if they continue to push harder, people will leave.
Apple rose to be the most successful company on the planet, but as other products come to market, and they disappoint with each subsequent launch, people will leave. Not the loyalists, not at first, but after a while the loyalists aren’t what keep a company going. It’s everyone else.
I agree, Tommy, brand equity isn’t permanent – it has to be earned continuously, although if you have enough of it you can squander a little (e.g., by introducing a mediocre product) and still hang in there if you recover your mojo fairly quickly.
Ah, you seem to have missed the UK’s most famous example the yeast extract spread called Marmite. Marketed as “Either you love it or you hate it”. Ran ads during the UK 2010 General Election for Love and the Hates parties.
Got a great following on Facebook for discussions of various ways to love it. (presumably not getting Likes from haters)!
Interesting, Imogen, though perhaps a bit different because those who like Marmite use it, and those who don’t avoid it. Many people WOULD avoid Walmart or United Airlines if there were competitive alternatives that met their needs.
They didn’t upgrade you because they wanted you to pay for premium service.
Yep, that’s one way the airlines are hurting their brands. They view previously free amenities as something that can be sold for incremental revenue. I just saw that Allegiant is about to start charging $35 for a carryon bag. If the majors try that, expect many howls of pain from consumers. That doesn’t mean they won’t try, though.
These incremental charges are an excellent example of how to create “pain of paying.” Not only do they create additional pain points as the consumer makes the reservation or travels, but they also assign a high price to something the consumer has been conditioned to expect for free. Ouch!
So Roger, what would you recommend for some of the brands above to help recover and bounce back.
The airlines are in a difficult spot, as they can’t exert price discipline in the competitive environment that exists. Empty seats are perishable inventory, so all the airlines drop prices to maximize load and then try to boost profits with fees. Half the time the seem to be in some phase of bankruptcy, and they also skimp on customer communication and service.
Southwest has succeeded by striving for better customer relationships and avoiding many of the onerous fees and practices of their big competitors. Queuing up electronically for seats is a lot more democratic than finding that on a half-empty plane no aisle seats are open because they are being held for “elite” members.
I think it would be great if one of the big airlines renounced all the BS, focused on customers, even if they had to raise prices a little. I think they’d steal share from competitors if they could convince consumers they really had changed their attitude.
You’re just bitchy because you didn’t get a discount on your Walmart luggage before your standby… ;-P
“Why does @AmericanAir prefer to fly an empty seat vs letting a non-elite biz passenger standby? #FAIL #dumb”
ummm… let me see…
There’s an empty seat in the earlier flight…
You want it…
So they move you up…
Now there’s an empty seat on the later flight…
Either way AA is gonna fly an empty seat…
Would having them give you the seat on the earlier flight change the way you think about AA?… I doubt it… It might have made you happy for the moment but I think your hatred of the airline would still be there… to them that’s a no-win situation, so, they just let you sit for an hour…
You tend to equate grocery shopping needing to be like a pleasure trip… You like nice stores with nice products (elitist much?)…
A grocery store is a grocery store… 99% of what they carry they all carry… Trader Joes is a specialty store… they are not a full-blown grocery store… I see them more as a gourmet store than a grocery store (limited product lines)… Whole Foods may be nice but you better make a truckload of cash if you’re going to shop there regularly because it’s freaking expensive… they charge a premium because people think if it’s expensive it’s somehow healthier for you… It caters to a specific demographic, mostly upscale BMW-driving soccer moms thinking that buying the brands/products offered there makes them a better provider or will make them feel more superior because they don’t shop at the “lower class” supermarkets (they still do, they just won’t admit it)…
I don’t go to Walmart to have chit chats with personnel or for the ambiance… I go there to get what I need to get and because the prices are good… most of those shopping in Walmart are lower income folk that need bargains and would be both out of place and lost in stores like Trader Joes, Bristol Farms, Whole Foods… and Walmart sells more than just groceries, they offer a ton of other stuff at prices the majority can afford… No, the stores aren’t pretty… but one quick look at the website http://www.peopleofwalmart.com will quickly give you an idea who the majority of shoppers there are… Walmart is a success and continues to grow and profit because they know who their core base is, and it isn’t those who drink tea with their pinkies raised…
PS: I don’t know who Consumer Reports surveyed but Publix is a big chain in Florida and they are overall hated…
Les, it’s actually a smart business move (from a purely logistical and load management standpoint) to fill the earlier seat if possible. In the airline biz, things change quickly. A seat that flies empty can never be sold later. An empty seat on a later flight MAY be sold due to changes in individual travel plans, delays and cancellations of alternate flights, and a host of other reasons. Or, if the later flight is itself cancelled, the passenger that caught the earlier flight is out of the system and need not be put in a hotel, scheduled on a competitor, etc. Making life difficult for a business traveler and wasting inventory at the same time seems short-sighted.
Companies like Walmart that are capable of owning an entire market segment, and dominating with a strategy that allows/requires a high volume of transactions, are destined to have very, very unpleasant interactions with customers, because they need to wring every last drop of efficiency out of their interactions with customers. The companies that don’t adopt this strategy can win with customer-centric approaches, which is good, because they can’t win on price…
I agree, Will, being the low-cost provider does make offering high levels of customer service tougher. I don’t think they are always mutually exclusive, though. Amazon is usually highly price competitive, and offers phenomenal fulfillment and good service on those rare occasions when an electronic transaction needs human intervention. People will often accept the tradeoff, though, and settle for a cheaper price and worse service.
Another reason to fly an airline I hate? They are the only airline that flies where I need to go. Years ago I swore that I would never fly on a specific airline again. And through mergers they are now the only airline that serves the region where my parents live. Seeing parents versus avoiding bad personal experience? Parents win every time. But I still hate that airline.
Makes sense, Liz. For years I flew out of SBN (South Bend, IN) and often there was only one viable choice for a particular destination. Another factor is the line’s loyalty program. I’m sure that some flyers still select the loyalty program where they have the highest status, even though they’d prefer another carrier. Of course, once you get enough miles, your service will likely improve, too.
This is an excellent study I never thought of the love/hate relationship people have with the products they consume. I don’t want to be disliked I just want to be hated!
The reason is actually quite simple. People (especially in this economy) have to be pragmatic, i.e. buy from Walmart. Of course, they’ll hate it.
In the boom times, they visited (aspirationally) Gucci and were trilled by the quality of the products. They loved it.
Another analogy will be comparing the experience of buying a Porsche or BMW and buying a second-hand truck from your neighbor who’s worse than you.