It is well accepted that through brands consumers express themselves.When using a brand, the qualities and image, associated with it, attach to the consumer, augmenting his or hers perception of themselves. Using a brand expresses who you are or who you want to be.

Consumers often prefer brands that project images similar to their own self-image. Additionally, individuals have the tendency to enhance their image in the perception of other people. Products and brands are used as instruments of symbolic communication in social interactions to project the desired image.

In theory, consumer-brand identification is an underlying factor of a strong relationship with the brand and loyalty to that brand. In our research we wanted to confirm whether the consumer-brand identification plays a role in building the relationship with the brand, in establishing loyalty and willingness to pay a higher price.

Also, we wanted to understand whether the consumer-brand identification is an equally important driver across different product categories.

The research covered 10 industries/categories: Airlines, Automotive, Cosmetics, Financial Services, Food, Retailers, Soft Drinks, Alcoholic beverages, Technologies and Telecommunications

We studied different levels at which brands may connect with consumers:

• Consumer-Brand Identification:Self-Identity, Group Identity, Common values, Aspirations
• Experiences and emotions
• Utility: Product quality, Instrumental to achieve objectives

Our test model of Consumer-Brand Identification includes four expressions – the first is self-identity, when the consumer finds similarities between himself or herself and the image of the brand. We also tested group identification – whether using the brand creates the feeling that you belong to a particular group. The values the consumer shares with the brand is another variant we tested. And the fourth expression of Consumer–Brand Identification is on aspirational level – whether the brand expresses the lifestyle one aspires to.

Not all four were equally important in determining the relationship with the brand: self-identity, followed by common values with the brand played a role in more categories. Also, there were differences across categories: self-identity determines the relationship with the brand in telecommunications and retail, food and soft drinks, while group identity has shown importance in telecommunication and alcoholic beverages only. The common values of the brand and the consumer are a driver for consumer-brand relationship in automotive, financial services and alcoholic beverages. And finally, the aspirational level of the consumer-brand identification works in cosmetics and retail.

Overall the consumer-brand identification is a stronger driver than experience and utilitarian factors (quality mostly) for building a relationship with the brand for airlines, alcoholic beverages, automotive and retail.

When it comes to paying a higher price, group identity and aspirations are active across more categories. Group identity determines the willingness to pay a higher price for airlines, financial services, retail and soft drinks. The aspiration towards a certain lifestyle determines the willingness to pay more in automotive, food, cosmetics and technology. Common values with the brand are important in financial services, telecommunications and alcoholic beverages. Self-identity is a driver in only cosmetics and telecommunications.

It is very interesting to see that Consumer-Brand Identification determines overall the willingness to pay a higher price more than experience & emotions and utilitarian factors in all of the tested industries except fmcg.

Loyalty (measured as purchase intention) seems less influenced by the Consumer-Brand Identification. Utilitarian factors and quality in particular are a stronger driver for building loyalty among the tested factors.

It sounds seducing to be able to ask only one question and gain the ability to manage customer loyalty and financial growth.

Could a single question be more effective than the complex customer satisfaction and loyalty studies that require clients to have an expertise in statistics so that they can read the findings?

Net Promoters Score was (and still is) heavily marketed and companies were getting curious. When a client of ours asked us to run an experiment and compare NPS with the customer satisfaction and loyalty metrics we set up a study to compare. Our client business is in one of the industries used in the examples for NPS effectiveness, the company is a triple play operator, providing pay TV, Internet and fixed telephone services.

One of the most compelling arguments used to promote NPS are results from a large scale survey demonstrating that the “likelihood to recommend” question proved to be the first or second correlate to the actual customer behavior 80% of the time …if customers reported that they were likely to recommend a particular company to a friend or colleague, then these same customers were likely to actually repurchase from the company, as well as generate new business by referring the company via word-of mouth.

In the quoted results the correlation between loyal behavior and overall satisfaction was found in less than 10% of the cases.

So, basically the argument why NPS is the loyalty measure goes that it is unnecessary to measure satisfaction, since it does not explain loyalty. Instead, recommendation has the highest correlation with loyal behavior.

It is quite logical to expect someone who recommends a product to also be likely to buy it. For us these are two types of loyal behaviour and certainly their correlation is high. NPS is offering a model in which one loyal behaviour is used to measure another, so what? We were ready to test how effective it can be.

We included the “single loyalty question” („Would you recommend company Х to your friends”, followed by a second question to clarify the reasons) in the beginning of the survey and continued with the full scope measurement of satisfaction and loyalty. The interview length was around 15 minutes and varied depending on the service package of the participant.

Our main interest in that comparison was firstly how actionable that methodology is, what can you do with the findings, once you have calculated the score. And secondly, just for the record, to investigate the link between satisfaction and loyal behaviors, recommendation being one of them.

On the first point, had we relied only on the NPS section, we would not be able to run the analysis and recommend an action plan. With the available information gathered with the NPS method it was not possible to get a clear understanding why the index is as it is (low, around 15 points) and to recommend an action plan how to improve. When explaining their intention to recommend (or not) customers raise the hot, most irritating and painful issues. Solving them is obviously a must, but they are only the visible part of the iceberg and the comprehensive picture of customers’ experience was missing.

We had though some interesting findings on the correlation between satisfaction, recommendation and the intention to stay with the company.

It was interesting to notice that satisfaction had higher correlation with the intention to stay with the company compared to the likelihood to recommend it. A significantly higher percentage of the satisfied customers were planning to keep using the services of the company than of those who would recommend it.

Why would customers be loyal in action and reluctant to recommend? The tendency to recommend has its cultural basis, and also is industry specific. There are cultures in which people are less likely to share the good impressions. And some in which the critics and haters are more active. Like ours.

The other factor to keep in mind is the type of industry or category you are investigating. Customers are less passionate to product categories and services which are of lesser importance to them and simply do not care enough to voice their experience.

Our results did not confirm that Net Promoter Score is the single, most effective question for accurately measuring customer loyalty. When it comes to the bottom line, the actual decision to stay or leave, there is a significant group of customers who are not promoters but still keep using the products of the company.

For us the solution to effectively and accurately measure customer loyalty lies in setting a set of measures, including detailed mapping of satisfaction across touch points of customer experience, customer perceptions of the brand and the emotional blueprint in the interaction with the company. The analysis of the findings determines the key drivers of loyalty.

Recommendation is a type of loyal behavior and thus important to measure and understand as it reflects the potential of the brand to create positive word-of-mouth or negative comments.

NPS can contribute in benchmarking of that potential against companies in the same industry and country.