What Is Brand Switching? Reasons And Ways To Prevent It
By Indeed Editorial Team
Published 2 July 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Customers who are loyal to a particular brand over a long time may switch brands for various reasons. Efficient customer retention can help an organisation prevent loss of revenue and improve brand image. If you are in the marketing profession, learning about the reasons behind brand switching can help you retain customers. In this article, we answer the question, ‘What is brand switching?', explore the reasons behind loyal customers moving to other brands and provide tips on how to prevent this.
What Is Brand Switching?
The answer to, ‘What is brand switching?' is that it is the behaviour of a customer of a particular product or service who switches to a different brand after being loyal to one brand for a long time. For example, if a customer has been buying Soap A for twenty years and then suddenly decides to switch to Soap B, this is brand switching.
Brand switching occurs only with loyal customers and not with customers who are not particular about any one brand. For example, if a customer buys Soap A for one month and Soap B for the next month and a third brand, Soap C the third month, this qualifies as the customer being brand agnostic and is different from brand switching.
6 Reasons For Brand Switching
Here are six key reasons loyal customers may consider switching brands:
1. Price–value gap
One reason customers become loyal to a particular brand is that they find the value of the brand's products matches their expectations. For some product categories, especially those that are higher in price, the customer may eventually choose to look at other brands for a lower-priced option. Consider a consumer who has been using a certain brand of washing machine for 10 years.
At the end of the life of the machine, they buy another washing machine from the same brand. It lasts another 10 years. After two washing machines, the customer may have budgetary constraints and begin to look for another brand that provides the same features but at a lower price. A lower price for the same value would make the customer switch brands.
2. Poor customer service
For expensive products, the value of customer service is key to brand loyalty. This includes after-sales service. If a brand has been providing consistently good customer service for a long time, it can retain customers easily, but if the quality of customer service fails to meet the expectations of the customer, they can switch to a different brand. When a customer decides to switch brand due to failing customer service, they place this criterion on their priority list when shopping for a similar product from a different brand.
Consider a brand of washing machine that has provided good customer service for years. It suddenly begins to falter in its responsiveness during after-sales service. Then, it may start to lose its loyal customers to another brand that provides a machine with limited features but great after-sales service.
3. Lack of variety
Retail staff often notice this issue affecting products for everyday use, for example, potato chips. A customer may like a particular brand of potato chips and decide to buy it every time they crave this type of snack. If the potato chips from this brand continue to be the same for years, the customer may eventually get bored. Their taste may change, or they may want to try something that other people are having.
They may start shopping for other brands that bring new flavours to the market. This is brand fatigue. It is not that the customer does not like the original brand of chips. They only want to check what else is available by trying different brands.
4. Lack of adaptability
The adaptability of a brand comes from understanding the customers and paying attention to their requirements. When customers who have been loyal to a brand for years due to the product value, price or aftersales service notice that there is little or no adaptability from the brand owners, they may consider brand switching. Imagine a scenario where a loyal customer of a watch brand walks into a shop to purchase a new watch.
They look around and notice there are no new models that suit their thin wrist size. They provide feedback to the shop and return with an assurance that the shop staff plan to investigate this issue. Six months later, when the same customer comes back to the shop, they find no indication that the brand has even acknowledged their feedback. This can cause the customer to walk away from the shop and start looking for suitable watches elsewhere.
5. Competitors' innovation
This reason for brand switching often occurs in technology products like smartphones. Technology improves at a rapid rate and all tech-oriented brands constantly strive to innovate and incorporate new technologies in their products. This results in a highly competitive market that attracts customers to different brands.
In the smartphone category, you may find loyal customers that stick to specific brands every time they buy a new phone. Eventually, these loyal customers also begin to evaluate new technologies, features and specifications and look at different brands before they purchase their fourth or fifth smartphone. A customer who was loyal to one brand may end up buying a smartphone from a different brand if it can innovate faster at a reasonable price.
6. The convenience of a competitor's product
The convenience of purchasing and using a product can make customers switch brands even when they do not want to. Consider a customer who has been using a particular brand's microwave oven for many years. Suddenly, the oven stops working and they immediately decide to purchase a new one. They would prefer the same brand, but they discover that it is only available online and may take three to four days to arrive.
This is inconvenient for the customer, but they can walk to another brand's shop near their home. They purchase a microwave oven with similar features and in the same price range more conveniently from the shop. This example demonstrates how competitors can make their products more convenient to use or more accessible for purchase ,which can ultimately lead to brand switching.
Tips To Prevent Brand Switching
Here are some tips that can help brands retain customers and prevent brand switching to improve company revenue:
Re-evaluate the value proposition
A good value proposition can make your brand's product attractive to customers and encourage them to return to make more purchases. If the customer understands that the value of the goods that the brand is selling justifies the price, they may continue to purchase from the same brand regardless of the value proposition that other brands offer.
To improve the value proposition of your brand, you can perform product testing to discover which product features provide more value to your customers. This kind of testing also allows the brand to gather feedback from existing or potential customers and incorporate the changes that they recommend.
Improve customer service
A brand can improve customer service in many ways. One way is to maintain a customer retention department. The tasks of this department include regularly asking long-term customers for feedback. This department can also initiate customer loyalty programs that offer special discounts, upgrades and benefits to customers who have been using the same products for a long time.
Another way to improve customer service is to manage personalised marketing campaigns. The marketing department can segment users based on their brand loyalty and send out personalised offers. The third and the most direct way to improve customer service is to reduce query handling times at the customer care centre and provide quicker resolutions to long-term customers.
Analyse customer feedback
Customers tend to give feedback on most products they use. Since the development of social media online platforms, it has become easier for customers to send reviews. These provide positive and constructive feedback.
The customer retention team can analyse this feedback and check what the brand can do to improve customer experience. It may be a feature that the brand can improve in the next version of the product, or it could be a delivery issue that the brand can resolve by switching delivery partners. Customers typically appreciate a brand that acknowledges and responds to their feedback.
Consistently upgrade products
Releasing new products or upgrading existing products is often a great way to counter brand fatigue. If customers notice that the brand is investing in research and innovation and making their products more valuable, they may continue to buy from the same brand. A brand can also repackage an existing product to attract or retain customers. Rebranding a line of products or launching a new marketing campaign for an existing product can also maintain customer interest and prevent them from switching to a different brand.
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