Uncommon Cents

There are some brands that I just stick to–for operating systems, Apple. For motor vehicles, Toyota. For bicycles, although I’ve gone back and forth, I’ve mostly settled on Cannondale. This is known as brand loyalty, a commitment to keep purchasing products from the same manufacturer or company over and over again. There’s variations on brand loyalty; for instance, while Long’s Drugs isn’t (with rare exception) a manufacturer, people in Hawai’i will buy products there almost without regard to comparison shopping because they’ve done so for so long–the loyalty is so strong that despite the buyout of Long’s by CVS, CVS will allow Long’s stores to keep the Long’s name in Hawai’i and nowhere else. When someone asks me about mutual funds and one of the fund families involved is Vanguard, I’m tempted to say that you can’t go wrong there.

Brand loyalty is built by marketing, recommendations by influential people (which can be a celebrity spokesman or the word of a friend or someone you respect as an expert in the type of product you’re considering), and personal experience. Which of these plays the largest role in development of brand loyalty is hard to say; for me, my personal experience with Toyota, Apple, and Cannondale means a lot; for others, if they ask me about a computer and I recommend Apple, they are likely to take that into consideration if they consider me an expert in computers.

Is brand loyalty sensible? To some extent, it is; after all, it’s a lot easier for someone to keep doing the same thing over and over again then try something new. The question is if you’ll continue to get satisfactory (or better) results if you keep going with the same brand instead of researching other brands. It’s a tough question to answer, and it’s likely going to vary from situation to situation. For instance, I stay with Sprint not because I like their customer service, but because I like their pricing and their data speed; I was on TMobile previously and loved their service but they didn’t have the data speed I needed. While I consider other brands of bicycles based on price when I look at them, I tend to go back to the one I like provided that the price is at least in the ballpark.

So, in the end, my take is this: brand loyalty exists for a reason. If you are loyal to certain brands (or stores or mutual fund houses or banks or whatever else), consider what your reason is (or reasons if there are lots of them). Don’t be afraid to re-examine your brand loyalty! After all, it’s your money; don’t throw it blindly somewhere you had a great experience before. Consider carefully how well founded your loyalty is, and if it’s for great reasons, keep at it, but if those reasons have changed (or if the reasons weren’t all that great in the first place), consider switching.

Tags: Budgeting, Frugality, Social aspects

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