Are Costco members loyal or not?
Over and over I hear brands talk about their "loyal" customers.
What they're talking about, usually, is their heaviest customers. Or their most regular customers.
But heavy doesn't mean loyal. Nor does regular.
I say this a lot, because it's a major belief in marketing that heavy or regular = loyal.
Take Costco. A whopping 90% of members renew their membership (in the US). Look at that number and you think, "Wow, Costco members are so loyal! They must be a different breed. They must be loco for Costco!"
But it turns out the average Costco member only buys 15% of their groceries at Costco. Look at that number and you think, "Wow, Costco members have no loyalty!"
Both of these numbers are facts. So the fiction is the concept of "loyal."
As Inigo Montoya said, "You keep using that word. I do not think it means what you think it means.”
Almost universally, people tend to buy across a repertoire of brands. And even their favorite or usual brand rarely comprises more than 20% of their category purchases.
So in 2021 let's stop using "loyal" where we shouldn't.