Why Brand-Loyalists Pay More.

Imagine a world, where you willingly give your money to companies just because you like them. Yep, just because you like them and maybe even trust them.

Recently my wife purchased a tablet cover from Amazon and when it arrived, it had the sticker from the original shop. This is not any ordinary shop, but one of those big department stores that have been round for close to a century and have stores in all major cities. A store that has a prestigious image, up-market stylings and carries all the top-end brands.

So when this sticker revealed one company was charging 49.99 and another only 9.99, it is evident that people are willing to pay far more than is reasonable.

I like your logo and it makes me feel warm inside, here’s 40 bucks.

Don’t get me wrong, I understand that end of runs, over-stock, ugly colours etc get sold off cheaply, but never significantly below cost. 15% above or below cost would be fairly standard across the board. Assuming that the seller on Amazon sold it for 100% increase, we can assume they paid 4.50-5.00 for it before selling it for 9.99.

For the original seller, that’s some mark-up and some huge blind purchasing from their customers. Let me remind you, this was for a tablet cover; some leather, cardboard inserts and a nice little design. Similar products are available in every shopping centre or high street across the country.

So why do we pay more and who’s to blame?

Marketing teams work very hard for their companies to grow brand loyalty so that, we the customer, keep going back and buying more. In my mind, this is fine so long as they continue to provide value for money. We can’t blame companies for charging their customers more if their customers are willing to pay at this price.

Ultimately, it’s up to us as consumers to continually re-assess our options and what we receive for our patronage, the price and the service. Being brand loyal is only worthwhile if the brand deserves such loyalty. At iHawk GPS, we love our customers and we work very hard to maintain the best service at the best possible price so that we keep our customers happy and loyal.

Apple enjoys unparalleled loyalty, despite many basic functions missing like a USB port.

If the companies you buy from have started to abuse that loyalty or think that you should pay more because their logo is more comforting, it’s time that you re-assessed your options. In the long run, this will make all companies improve their product and be more competitively priced. And then we all win!

I look forward to reading comments from the marketing gurus about this topic and brand-loyalists alike.

Thanks for reading, Brad.

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