The Law of Diminishing Brand Loyalty
Cowan’s Law of Brand Decay
Brand Equity & Brand Loyalty Strategy
How to manage brand equity change that directly effects corporate performance
Brand equity & branding strategy for brands with diminishing or decaying brand equity or loyalty.
The future of profits, sales, market share and competitor success all rely upon Branding and Brand Management decisions effecting Brand Equity and brand loyalty.
Understanding the Law of Diminishing Brand Loyalty [Cowan’s Law of Brand Decay] ensures executives make brand portfolio decisions based upon objective brand equity measures so all business planning and marketing effort is cost effective and efficient.
The Law of Diminishing Brand Loyalty states, “Regardless of brand marketing or corporate branding issues, if customer expectations exceed the organisation’s ability to meet those expectations, the brand must ultimately develop negative experiences within the market causing decay in brand loyalty.”
Brand image, Negative brand equity & brand decay
Where Negative brand equity exists, brand decay sets in. Analysis and assessment of this process led to Cowan’s Law of Brand Decay which states… “If customer expectations exceed the organisation’s ability to deliver, then the brand must decline to where no amount of marketing effort can reverse its decay”.
While developing turn-around corporate planning of a billion-dollar division of a multinational, Leigh Cowan developed a branding model that has universal applications and forms the lynch-pin of modern commercial and academic understanding: The Law of Brand Decay.
The Law of Brand Decay explains accepted life cycle theory perfectly, inclusive of the marketing gap and product extension strategies.
The Law of Brand Decay translates the theories of Porter, Best, BCG and others into a practical and usable tool that empowers management and allows clarity of strategic thinking never previously known.
Properly used this law can protect companies from making disastrous long term decisions, reveal the critical issues in brand equity building and explain the fall of firm, industry and even political systems.
Implications of the Law of Diminishing Brand Loyalty
Suggested Life Cycle of Service Businesses where error-free is a Core Promise
The service organisation that is only appraised upon exceptions to perfect performance must have a diminishing level of loyalty over time unless it can maintain perfect levels of service.
Ultimately. the brand providing the service, regardless of it’s true competitiveness in the market place, will lose sufficient brand loyalty to lose the custom of its client.
Further, the perceptual barriers to re-establishment of a brand relationship will be inversely proportional to the operational loyalty of the organisation with whom the brand was originally servicing.
In other words, the longer you keep the client, the harder it is to get that client back once you have lost the brand.
Talk to Leigh Cowan about strategies to optimise profit, in the face of Diminishing Brand Loyalty, call or email to arrange a consultation & advice.
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Diminishing Brand Loyalty Explained – How to recognise brand decay, manage diminishing brand loyalty and even prosper by controlling, or even planning, brand erosion.
We all know the traditional life cycle curve: Introduction, Growth, Maturity, Saturation and decline.
Marketing professionals who are classically trained know the mandatory strategies that apply for each stage of the life cycle. Analysts evaluate investment decisions based upon life cycle.
Research companies boldly assess companies based in this model (although they seem to have forgotten that there are 8 alternative lifecycle models that could apply).
But what causes change in life cycle, and more importantly, how can this be used for commercial gain?
The Law of Diminishing Brand Loyalty Implications:
Sometimes called, “Cowan’s Rule of Brand Decay” is the missing, fundamental, cornerstone building block that joins all branding theory together and converts the discipline of marketing from a black art into a pure science
- Cowan’s Rule allows strategic marketers to better understand and predict their industry, company and brand life cycle curve.
- Cowan’s Rule sets concrete guidelines and when and if it is time to re-brand a product, a category or even an industry.
- Cowan’s Rule tells you when to start, to stop, to milk or to re-invest in a brand.
Embracing this rule empowers management to optimise brand revenues and brand portfolio decisions. HELP ME WITH MY BRAND/S
The Strategy of Planned Brand Obsolescence
Once you have identified that customer expectations exceed the firm’s capacity to meet those expectations, the strategy is clear.
You must plan for brand decay, brand obsolescence and short life span.
As an example, in many segments, it may be that your bank has not been able to fulfil customer expectations as to service. It is already uneconomical for the bank to continue to promote service as a point of differentiation. Strategically, it should re-launch itself under a new brand name, with new promises that the customer will allow into their latitude of acceptance.
The new entity could then make the promises, and ‘get away with it’. However, the existing entity cannot.
Hence, growth would be possible from launching a new entity, NOT from ‘flogging a dead horse;’.
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If you have read this far, you may want to talk with someone who can assist you to squeeze more from your strategic brand management… Why not get started now… Just email us by clicking this button or fill out this form and a consultant (or Leigh himself) will get back to you ASAP. Remember, “Procrastination is the thief of time” and the sooner you know the direction you are going in, the sooner you’ll achieve your goals!