Is the tide turning on brand loyalty as cost-of-living crisis hits?
Mounting price pressures are making many re-evaluate the brands they love. Despite sticking with their favourite products and services, a growing number of people say the need for better value is now an increasing need as prices rise.
- 55% of consumers remain just as loyal to their preferred brands as before the pandemic began. However, two fifths (39%) are now looking for better value for money when it comes to some of the goods and services they purchase as the cost-of-living crisis hits.
- Similarly in the current account market, 33% claim to be very loyal to their existing provider, but nearly one in five (18%) feel that the cost-of-living crisis is forcing them to seek out more help like additional overdraft facilities. One in ten (10%) believe that they now need banking services that can help them better track their spending.
- Jo Ainsley, Senior Service Lines Manager at Pay.UK discusses the current account switching process and Consumer psychologist, Kate Nightingale, offers her top tips for those looking to break their brand loyalty, and shares insight into the psychology behind switching.
22nd March 2022, LONDON: Most consumers have emerged from the pandemic with an unwavering sense of loyalty to their favourite brands. However, the tide may be turning as, for the first time, many begin thinking about whether switching away from their favourite brands could help them combat the ongoing cost of living increases. That’s according to new research conducted by the Current Account Switch Service.
In its latest research, the Current Account Switch Service found that 55% of consumers remain just as loyal to their preferred brands as before the pandemic began, with 52% of people stating that they would not think about switching from their current favourite brand unless it ceased trading.
Brand loyalty is particularly prevalent in relation to banks and building societies (30%), supermarkets (25%), mobile phone manufacturers (20%) and insurance (18%) providers, which were among the most common areas that consumers expressed a solid sense of brand dedication.
However, while most know the brands they like to buy from, four out of ten (39%) are now looking for better value for money when it comes to some of the goods and services they purchase. People are also increasingly aware of how brands align with their personal views. A quarter (26%) of people would be motivated to switch to a more ethically conscious brand, and 20% to a brand that was found to be more environmentally aligned to their views.
Current account switching
Default loyalty is particularly prevalent in the current account market. The Current Account Switch Service found that 29% of those that feel less likely to switch (post-pandemic) say that their existing provider’s performance through the pandemic has boosted their sense of loyalty. This is despite alternative current account options offering a better fit for their needs. One in five (22%) of this group also claim to be too busy with other things to switch current account.
When asked how they feel towards their existing current account provider, 33% claim to be very loyal and that it would take a lot to see any benefit in switching. One in eight (12%) claim they wouldn’t ever switch to another provider.
However, nearly one in five (18%) feel that the cost-of-living crisis is forcing them to seek out additional help like overdraft facilities and one in ten (11%) believe that they now need banking services that can help them better track their spending.
Jo Ainsley, Senior Service Lines Manager at Pay.UK, commented:
Consumer psychologist, Kate Nightingale, added:
Kate Nightingale’s top tips for breaking brand loyalty
- Benefits Ripple Effect – When reviewing the benefits of different providers or products, take each benefit and list three ways in which it can improve your life. For example, three ways to use your cash joining bonus to improve your wellbeing. Then place a value on each benefit based on how much good you feel it can bring to your life.
- List your values - When looking to switch, first list your own values and what's important to you. Then, take time to list the values you believe each of the brands you are considering has. Compare the two lists and start from the brand that you share most values with. Do they offer you all the benefits you need, want and desire?
- Changing environment - Changing your perspective can help you perceive the value of alternative brands or services. So, how about you research a new current account in a park instead of an office? You’ll associate the new account with the lifestyle aspects that are important to you, for example relaxation, friends, wellbeing. This will then allow you to think more logically about the value of certain benefits. Review your brands shortlist in two to three of your favourite environments few days apart and see how your evaluation changes. Then combine these evaluations together and choose the best option for you.
- Cosy it Up – When we put our body in a state of physical comfort (for example, snuggling up on a sofa with a blanket and our favourite cup of tea) it can make the process of tackling more difficult, or simply less familiar, tasks feel altogether easier. This simple change in behaviour can be a great way to overcome our natural biases with physical relief and pleasure.
- Try Something New - Always wanted to do a hula hoop exercise class, try that weird new cuisine or explore a new language? Go ahead. Once your mind is in ‘new experience mode’, it is easier for it to consider alternative brands/products/services. Your brain will simply be more open and less prone to default loyalties.