Brand Loyalty is a Myth in India

I know that's a huge statement but give me 2 minutes and I'll explain myself.

What is Brand Loyalty according to the nomenclature - Brand loyalty is a persistent consumer preference for a brand, shaped by emotional attachment, perceived value alignment, and cognitive biases that reinforce brand identification over alternatives.

What does this mean in colloquial words, it basically says that a customer is loyal to the brand regardless of any market or price fluctuations.

But before we talk about brand loyalty let's just start with loyalty that we understand in our day to day life. Loyalty is something that people give to their partners regardless if there are any ups and downs in their life or they get a prettier alternative. 

And loyalty requires strength. Let's say there are 2 guys. Naresh has a weak moral code, Suresh has a strong moral code, who do you think has a higher potential of not showing loyalty towards their partners.

But what does strength mean when we are referring to a consumer's loyalty towards a brand? MONEY. A consumer's strength purely from a business perspective is money. The more strength (money) your demographics of consumers have the stronger brand loyalty they will show.

And majority of the Indians are poor or lie in the lower middle class which means they have less money to spend which means they have less strength. And remember I am talking purely from a business perspective, don't misinterpret me as saying that poor people cheat or something, if you came to that conclusion and want to cancel me, go out and touch some grass.

Let me explain this with a case study.

JIO vs Telecom Industry 

It was the year 2016 and the Indian telecom market was dominated by Airtel, Vodafone and Idea. I still remember when I used to sit with my family and friends, everyone used to brag about how their sim card is better than the other one and how they will never switch. From the brands perspective they thought they had great brand loyalty amongst their customers, cause that's what textbooks teach you. 

But then came JIO. And it knew the Indian market better than anyone. JIO started giving out free data and free calls to everyone. And within its 1st year 100 million people switched. Where did the brand loyalty go? Huge corporations went bankrupt. Everyone I meet nowadays uses JIO. 

I told you loyalty requires strength and poor people don't have strength.

Exceptions

I know I might have generalised a lot of things until now but there are some exceptions to my claim:

Service Based Businesses - Service based businesses have a huge advantage when it comes to brand loyalty, cause of a major factor called trust. If a hairdresser cuts my hair perfectly as I wanted, I'll visit him even if his rates are slightly higher than the market price. If my car breaks down and I had a good experience with a mechanic in the past and I know that this guy won't scam me, I will have him as my mechanic for my entire life now. I'll suggest to all my friends to get your car fixed from him.

Problem Solver - If your product solves a problem that the customer was facing for years, you will never have a problem with developing brand loyalty ever. When I get a migraine there's a tablet that I buy that always works. It's the only tablet that I have found that works 100% of the time. But it's way more expensive than commercial tablets such as crocin but I don't care about price when I am in pain. You see how solving a problem gets you brand loyalty. Another example would be, if a guy is struggling with hair fall and is really worried about it and he finds a shampoo that claims to stop his hair fall and it actually works he is never buying any other shampoo in his life.

High Income Consumer - If your products lie in the premium or luxury market, you won't have a problem with building brand loyalty. Your customers are people who want high quality products and money is not an issue for them. I am making an assumption here that your business is already making quality products, of course you won't develop brand loyalty if your products are trash, that's common sense.

B2B Businesses - B2B businesses work on trust and handshake deals. If you have a supplier or a buyer that you have developed a good relationship with over time he won't choose anyone else just for a small margin. Majority of businesses prefer giving huge orders to people they trust and have been working with for decades. That's why new businesses have a hard time cracking the b2b market because trust building takes time.

Professional Help - Businesses that provide professional consulting such as Law Firms, Hospitals, Chartered Accounting Agencies have a very high customer loyalty if people have had a good experience with them in the past. Money is not a concern because people approach these agencies when they are facing a problem in their life which is similar to my above point about problem solving businesses.

Conclusion 

I don't mean to discourage anyone but it's important to understand the landscape you are doing your business in. And let's be honest, the majority of the Indian brands just sell the same Chinese products in different colours of packaging. If your product does not solve a major pain point that the customer is facing or your products don't lie in the luxury section you will have a very hard time developing brand loyalty in the Indian market.