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Advertising Age reports that a new study from Catalina Marketing suggests that “the top 100 packaged-goods brands saw reduced loyalty from 46% of their loyal consumers in the past year, exacting a steep toll on sales.”

According to the story, “The big brands fared better than the 52% rate of lost loyalists shown in a Catalina study two years ago that looked at a broader group of 685 brands. So bigger brands commanded more loyalty -- just not a whole lot more.

“On average, the 100 brands in the study grew sales 2.2% during a 52-week period ended early July, according to Catalina. But had the brands held onto their loyalists, they would have grown an average of 8.5% more.”

The story says that Catalina “defined as loyalists consumers whose frequent-shopper data from one year ago showed 70% or more of their category purchases going toward a single brand. Reduced loyalty was defined as cases in which people who qualified as brand loyalists a year earlier reduced their share of rand purchases in the same category to under 70% during the most-recent year.”

"This is a call for brands to continue to move to a consumer-centric marketing model and away from mass-marketing thinking," Todd Morris, exec VP-brand development at Catalina, tells Ad Age. "Most of CPG and [over-the-counter] marketing is built around measures of efficiency. This data would indicate we would be better suited to move toward looking at customer lifetime value and that real revenue growth could be found in small groups of consumers who offer infinitely higher revenue potential."
KC's View:
But what is brand loyalty, exactly? And how do you best engender it, especially in a time when economic concerns can trump both aspirational and traditional shopping behaviors?

These questions aside, I have to say that I agree with Todd Morris’s conclusions ... but feel compelled to point out what one of the great problems with the food retailing business is that in 2011, studies have to be done to point out that in the long run, consumer-centric marketing is more powerful and sustainable than efficiency-driven marketing.

It has been more than a dozen years since my friend and MNB fave Glen Terbeek wrote his book, Agentry Agenda: Selling Food in a Frictionless Marketplace, in which he said that retailers needed to become agents for the shopper as opposed to sales reps for the manufacturer. In doing the latter, and focusing on efficiency rather than effectiveness, traditional retailers have opened the door to competitors of all stripes that are trying to do it better.