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Christie Nordhielm
  Christie Nordhielm
 

Anatomy of a Loyal Customer

8/18/2008 --

Heads, hearts, and hands: All play a unique role when it comes to brand loyalty and consumers. “Head loyals” exhibit different behavior in the marketplace than “heart loyals” or “hand loyals,” and savvy marketing professionals will identify consumers' habits toward their products and tailor their strategies accordingly, says Christie Nordhielm, clinical associate professor of marketing at Ross. "The days of trying to be all things to all people are over —it is simply not a sustainable approach,” she says.

Nordhielm is the author of the Big Picture Framework, implemented by corporations worldwide and taught in the Ross marketing core. The Big Picture Framework focuses on the integration between strategy and execution. When it comes to brand loyalty, marketing strategy and execution can shift dramatically depending on whether a "head loyal" demands innovation in a product or a "hand loyal" seeks familiarity. In the following Q&A, Nordhielm talks about her new research and how it factors into the Big Picture Framework.

What are you thinking about?
One of the really exciting research projects I'm working on right now focuses on the varieties of brand loyalty and how that impacts marketing strategy. Basically there are three types of brand loyalty: head loyalty, which is just being interested in the features of the product; heart loyalty which is that really strong emotional brand loyalty; and hand loyalty, which is more habitual loyalty – the consumer just grabs the same brand every time out of habit.

One interesting thing is that the same person can have different types of loyalty to different products. One of our respondents was in general a rational, head loyal consumer. The he bought an iPhone and became a Mac-fanatic heart loyal. He considered it a "betrayal" when iPhone cut the price of their phone six weeks after introduction; so much so that he actually called the attorney general of Ohio to file a lawsuit against Apple. These are definitive signs of a heart loyal.

We've found that certain products do tend to fall in specific categories, but that tendency can be shifted with strong and successful marketing efforts. The key here is that different marketing strategies and tactics are called for with different types of loyalty. For head loyals the firm would likely implement lots of product improvements and then introduce and promote them heavily. In the case of hand loyals, however, the trick is to maintain the habit, so product changes should be more subtle and gradual; the emphasis should be on maintaining distribution and product quality. Finally, heart loyals need to feel they are being heard and understood, and this calls for great customer service and research.

Why is this interesting to you?
I think the single determiner of success in marketing is curiosity about the consumer. You have to be interested in what moves them and causes them to do what they do. My students who have been most successful have that curiosity. They are very interested in understanding why people roll their toilet paper off the top or bottom of the roll, or whether the consumer is emotionally attached to the Kleenex brand or they just buy any kind of tissue as a matter of course. I share that interest. It has fueled my research and ensured its applicability from a managerial perspective.

What are some of those applications from a managerial perspective?
Well, in the marketing core, we teach the Big Picture Framework, and we talk a lot about identifying a company's core competence—what they're very good at —and then leveraging that into a benefit, and then focusing on that benefit in a single-minded way. The days of trying to be all things to all people are over —it is simply not a sustainable approach. We are no longer in the era of simply identifying customer needs and attempting to fill them. Today's successful marketers recognize that it is possible to shape consumer needs and therefore shape the market, driving demand in such a way that the firm is better able to meet these needs. Instead of being a static, one-sided equation, it is a two-sided equation with the firm's competencies on one side and its ability to develop demand for benefits that can be generated from those competencies on the other. This is the key to sustainable competitive advantage.

Let's think about core competence vis-a-vis these three types of loyalty. The skills the firm needs to maintain a hand-loyal customer base are very different than those needed to keep heart loyals or head loyals happy. It has become difficult, if not impossible, for a firm to profitably meet the needs of all three of these groups. Apple is usually pretty terrific at maintaining heart loyalty, but as their customer base grows they may see more head loyals entering the mix with different demands. Toyota appears to engender head loyalty — their consumers regularly list off rational reasons why they buy the car. And Morton Salt still maintains a healthy group of hand loyal consumers —they buy the salt out of habit, despite the premium, and they are unwilling to go to the trouble of looking for alternatives.

With the Big Picture Framework, we are able to make the link between firm competencies and consumer needs, and this is how we achieve the integration of execution and strategy. It has been great to watch it being leveraged by Ross students and in "live" business situations.

For more information, contact:
Bernie DeGroat, (734) 936-1015 or 647-1847, bernied@umich.edu