Study shows brand loyalty dwindles as economy tumbles

NEW YORK Consumers tend to be more fickle than devoted in a failing economy, according to a new study.

In conjunction with the CMO Council, Catalina Marketing analyzed the household consumer shopping behavior of 32 million consumers across 685 leading consumer packaged goods brands and found that only 4-out-of-10 brands retained 50% or more of their highly loyal customers. Less than half of loyal consumers (48%) showed brand loyalty from 2007 to 2008.

"The common belief is that loyalty stays high in an economic downturn. The fact is that loyalty is fleeting and it's up for grabs," said Todd Morris, SVP at Catalina Marketing.

For brands, the cost of dwindling loyalty can be high. Tide's loyal shoppers spent 6% less on the brand, costing Tide 5% of its revenue. If anything, the Catalina study may serve as a wake-up call to marketers to think beyond the quick sale.