Loyalty Suffers When Consumers Pinch Pennies

NEW YORK It may be a case of shooting the messenger, but Avis has been knocked from the top of the Brand Keys Customer Loyalty List for the first time in the study’s 10-year history.

“People are concerned about gas prices,” said Robert Passikoff, president of New York-based Brand Keys, by way of explanation. The rental car company dropped to third this year.

Brand Keys polled 26,000 men and women by phone and personal interview, in August and September. Respondents showed a strong inclination for brands that either saved them money or were perceived as having good value.

The top two brands are, in fact, free to use: Google and Yahoo. Ted Selame, CEO of Brand Equity, a marketing consultancy in Newton, Mass., said this top placement is a sign of the times. “Everyone is on the computer all of the time. My wife is on Google right now, searching for a restaurant,” he said.

Lisa Bradner, senior analyst for Forrester Research, Cambridge, Mass., said both companies need to tread lightly if they want to keep their loyal users. As they expand their search advertising revenue, “they run the risk of losing that loyalty and integrity,” said Bradner. “It still has to be about delivering the best information, not just displaying the information from the company which paid the most. They are at a crossroads because there is a potential conflict of interest.”

Placing information at consumers’ fingertips also helped to propel four catalogs into the top 25. J. Crew got the biggest boost, soaring to sixth place from last year’s 106th spot. It’s mail-order cohorts include L.L. Bean (4), Sears (14) and Lands’ End (24). Amazon.com finished 12th.

“Consumers are letting their fingers do the walking. This way they don’t have to drive,” Passikoff said. “Decisions aren’t being made purely on price, but the changes in the economy are certainly having their effects.”

High-definition televisions appear to be a good value, as six different models made the top 50, thanks in large part to vast price reductions. “According to our research, price is the No. 1 reason people are buying HD TVs,” said Josh Martin, analyst for The Yankee Group, Boston. “Still, they are the centerpiece of the home, so you want a brand name that assures you quality and is something you can show off. Plus, if you’re making an investment for 10 years, you feel that a brand name is better.” Panasonic Plasma TV (20) and Sony LCD (28) led the pack.

Coors (5) and Miller Genuine Draft (16) also fared well, as did more cost-effective hotel chains like Hyatt (9) and Marriott (15). For comparisons’ sake: Marriott’s Ritz-Carlton chain spiraled from No. 20 to No. 45. “Luxury brands are feeling the pinch,” Passikoff said.

Millard “Mickey” Drexler, chairman and CEO of J. Crew Group, New York, said the catalog’s success is about more than convenience. “It’s in everything we do. It’s our passion for quality, design, style, customer service…We don’t sleep at night until we know we are doing everything we can to satisfy our customers.”

Verizon Wireless also used superior service to propel its brand from No. 54 to No. 10. “We’ve been aggressive and consistent with our [‘It’s the network’] message,” said John Harrobin, svp of marketing and digital media for the Basking Ridge, N.J.-based wireless provider. “It reinforces our proposition as being reliable, innovative and providing the best customer service at every touch point.”

The National Hockey League, still feeling the effects of its strike-shortened 2004-05 season, finished last (361). Other bottom dwellers include Con Edison (360) and Gap (259), which, according to Passikoff, “is a brand that stands for nothing.”