5 Companies With Customer-Loyalty Staying Power

Companies spend huge amounts of time, energy, and money to capture consumer desire. As Tom Peters, co-author of In Search of Excellence, says, "As a consumer, you want to associate with brands whose powerful presence creates a halo effect that rubs off on you." The 2012 Loyalty Leaders List from Brand Keys, an independent research consulting firm specializing in consumer loyalty, lets us get a close look at which companies have the hearts of millions under lock and key, and which ones can't seem to locate a heartbeat.

Here's what works for the top five brands:Apple  (NASDAQ: AAPL  ) , Amazon.com (NASDAQ: AMZN  ) , Samsung, Call of Duty, and Halo.

Apple of my eye
Apple is the undisputed king of personal electronics.

Source: Brand Keys' Loyalty Leaders List 2012. **No other brands listed within top 100.

With its reputation for innovative products and a focus on quality, it's easy to see why consumers pick Apple's products. But the company's hip status really drives sales. With creative and edgy advertising campaigns, Apple portrays its customers as cool, tech-savvy people who buy its products to meet their creative needs. While that may be the case for many of Apple's customers, the rest of us (yes, myself included) are hoping that that image will rub off on us just by owning its gadgets. 

Not just a river in South America
Online retailer Amazon clinched the No. 2 spot on the survey with its Kindle tablet. (It also ranked No. 4 overall for its general business as an e-tailer.) The company's website is easy to use, its products are usually priced cheaper than other retailers', and it ships purchases quickly. At the base of its operations, Amazon is a ruthless company that undermines other retailers by creating better conditions for its customers -- not a bad business model.

On top of its success with online retail, Amazon has captured a huge share of the tablet market with its Kindle. Sales of the Kindle during the Black Friday/Cyber Monday weekend doubled compared to last year, with Cyber Monday being the "biggest day ever" for Kindle sales.

Samsung: The quiet giant
You don't really hear a whole lot about Samsung, but the Korean tech company ranked third on the survey for tablets, and second after Apple for both phones and computers. In fact, Samsung's smartphones moved up 30 spots on the survey from its ranking in 2011.

While all phone/tablet/computer producers have to compete with Apple, Samsung has the added benefit of a collaboration with Google, which gives the company the Android platform for both its phones and tablets. Android currently holds the largest share of phones of all the available platforms, double the number of phones running Apple's iOS.

While Samsung quietly holds its ground, rivals Nokia and Research In Motion have both lost most of their market share. Those competitors not only need to innovate to try to drive sales back to their brands, but they also have to compete with equally novel developments from Samsung -- like flexible screens.

Siren's Call (of Duty)
This may be news to most investors, but Call of Duty's top-five ranking was not a surprise for Activision Blizzard (NASDAQ: ATVI  ) . The game developer recently released the newest edition of its popular first-person combat game, Black Ops 2, to overwhelming demand. The record for pre-orders of a video game was held by the previous installment, Modern Warfare 3, but Black Ops 2 promptly smashed it. Its first-day sales beat more records, topping out at more than $500 million.

The game's realistic fighting action, multiplayer mode, expansive maps, and... wait for it... zombies(!) make for an entertaining and almost addictive pastime. In fact, one player recently broke the world record for total hours played consecutively (of any video game), with a five-day stint coming in at 135 hours.

I've got your Halo right here...
Given the Peters quote in this article's first paragraph, it's almost fitting that the Halo video game comes in as the No. 5 brand. Originally created by game developers Bungie and currently owned by Microsoft (NASDAQ: MSFT  ) , Halo is a sci-fi first-person-shooter game that centers around an intergalactic war between humanity and an alien alliance, the Covenant.

The Halo franchise has become known as the "killer app" for Microsoft's Xbox 360 -- meaning that the game loaded on the console is more valuable than the console itself. Not a bad problem for Microsoft to have, since it owns both the game and the console.

Branding your portfolio
While brand is not everything, the Loyalty Leaders List highlights the companies that have gotten something right. And appealing to customers will put you at the top of your industry. Brand power is one of the first measures of competitive advantage that Foolish investors look for. By finding a company that can leverage its brand power, like any of the companies listed above, investors can profit from long-lasting customer loyalty driving sales.

With its record holiday sales, diverse operations, and reputation as the big bad wolf in the retail world, Amazon may prove to be the best brand of the bunch. But at its sky-high valuation, some investors worry its share price will get knocked down, instead of its competitors'. Some of my fellow Fools have pulled together some signs for when to buy and sell Amazon in a new premium report. And with more holiday sales coming through Amazon's (Web portal) doors this month, our report keeps you informed as the company's story changes with a full year of free analyst updates. To read more, click here now.


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  • Report this Comment On December 04, 2012, at 3:58 PM, deasystems wrote:

    The author stated that "Amazon has captured a huge share of the tablet market with its Kindle."

    Actually, no one really knows what share Kindle has because Amazon steadfastly refuses to reveal unit sales data. In any case, we know the share cannot be "huge": That characterization has to be reserved for Apple's share which we *know* exceeds 60%.

    And by the way, there's nothing "quiet" about Samsung. It is currently spending $12 billion annually on marketing activities, more than Apple, Microsoft, HP, Dell, and Coca Cola *combined*! Apparently, that and regular resort to buy-one-get-one-free deals are what one has to do to compete with Apple...

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