Brand Switching: Introductory Playbook [2020]

Brand Switching Introductory Playbook

Today, we are going to talk about brand switching.

We will discuss:

  • What brand switching is
  • How it impacts your marketing team
  • Research-backed reasons why customers switch brands
  • 5 data-driven ways to deal with brand switching

This is a quick introductory playbook to a much bigger topic, that will give you a good grounding in the how’s, what’s, and why’s of brand switching.

Let’s get started.


What Is Brand Switching (And What Does It Mean For Marketing Teams)?

Brand switching is when a customer stops buying one brand’s products and chooses to buy them from a direct competitor. It is the polar opposite of brand loyalty.

For example:

If a consumer has always used Apple’s iPhone(s) but then decides to buy a Samsung Galaxy, they have switched brands from Apple to Samsung.

Brand Switching Illustration

Research shows that brand switching is a normal part of doing business:

However, the severity of brand switching varies from industry to industry.

It is normal for customers to switch brands in commoditized industries, based on who offers the best deal or convenience at the time of purchase. We can see this in places like:

  • Retail
  • Food
  • Auto repair
  • Parcel delivery

It is less common for customers to switch brands in brand- or product-led industries, like:

  • Fashion
  • SaaS
  • Electronics
  • Banking

This is because they have ample opportunity to inspire brand loyalty and create emotional connections with their target customers.

Your marketing team is typically looking to either promote or avoid brand switching by convincing:

  • Potential customers to choose your brand
  • Existing customers to stay

But why do customers switch brands in the first place?

Let’s take a look:


The Driving Factors Behind Brand Switching

There are hundreds of potential factors that drive brand switching.

As such, we cannot say exactly why customers in your industry switch. But, there are some proven reasons that cause customers to switch brands.

Consumers surveyed by Nielsen said they switch brands because of:

  • Better value for money
  • Better quality
  • Better prices
  • Better convenience

Basically, if there is a relevant improvement, customers are happy to switch. These factors have the most influence when two or more products can be directly compared.

Brand Switching Improvement Factor

However:

There is a growing trend in customers switching to brands they can better associate with, or that “get them” in a way other brands do not:

  • 14% of customers are willing to switch if the brand aligns with a relevant cause
  • 54% of customers would switch if they were offered more relevant content or coupons

There are also several other factors, which are harder to quantify but no less important, that influence a consumer to choose a new brand.

Things like:

  • Changes in household income
  • Customer service experience
  • Technological changes
  • Political views

Chik-fil-A customers, for example, may have switched away from (or to) the brand following the reveal of their public stance on LGBT marriage.

This goes to show that if you can establish a connection with the customer, they would be willing to switch to your brand. (The inverse is also true.)

All of this leads to the big question:

What steps can your marketing team take to better promote or avoid brand switching?


5 Data-Driven Ways Marketing Teams Can Deal With Brand Switching

Customers are vocal about what they like (and, well…do not like) about brands.

There is a wealth of data to draw from to help your marketing team stop customers from switching, or convince them to choose your brand in place of your competitors.

5 Data-Driven Ways Marketing Teams Can Deal With Brand Switching

Here are five customer-research-backed ways to deal with brand switching:

  1. Focus on value: 92% of customers rank value as the reason they choose a brand. This is driven by factors like price, content, and engagement. Agile Marketing strategies can help you create a more value-driven marketing approach.
  2. Support your customers: 42% of customers would switch from brands that did not offer real-time support, but 51% said they would stick around if support was offered on their preferred channel. This is where social media support can really come into its own!
  3. Build a great experience: 80% of customers are willing to pay more (and switch brands) for better customer experience. Personalization is key here, with between 33% and 51% of customers citing co-creation and immersion as reasons to stay with a brand.
  4. Care about your customers: 68% of customers switch because they feel you are indifferent to them. Show them their business is valued and appreciated!
  5. Address negative reviews: 57% of customers would stop using a brand if a negative review went unaddressed. (Loomly’s Interactions feature can help you stay on top of this.)

What you may notice about these points is that they are all emotionally driven. They all call for the customer to be valued, appreciated, and treated with respect.

This creates a core foundation for brand loyalty and customer retention to be built upon!


Brand Switching In A Nutshell

Brand switching is when a customer ends their relationship with a brand they were once loyal to and switches to a competitor.

This is a common behavior and is to be expected to some degree. It is especially normalized in commoditized industries but may indicate a deeper problem in brand-led industries.

Brand switching is driven by lots of internal and external factors, including (but not limited to):

  • Better prices, products, or customer service
  • Convenience and location
  • Changes in household income
  • Political views

Your marketing team can either promote or avoid brand switching by focusing on emotionally-driven aspects such as:

  • Your value proposition
  • Customer support
  • Customer experience
  • Engaging with customers
  • Addressing negative feedback

If you would like to learn more about brand success, teamwork, and tools that can help empower your marketing team’s communication, we recommend you to join the Loomly newsletter. Every Thursday, we hit your inbox with an update latest content, ideas, and industry news to help your team get ahead. You can sign up at the top right of this page, from the “Build A Successful Brand” widget.


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