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Shockingly This Company Ousted Apple as This Year's Brand Loyalty Leader

By Sean Williams – Oct 25, 2014 at 8:30AM

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Apple has been dethroned as this years top brand for consumer loyalty in Brand Keys' annual study. Find out which company ousted the tech giant and took its place.

Getting consumers to open up their wallets can be a tough challenge, but turning a consumer into a customer for life is even more difficult. The reality is that businesses need to deliver on all fronts, providing a superior product or service in what's becoming an increasingly competitive market across all industries for consumer dollars.

But, measuring customer loyalty to a brand hasn't always been easy. Sure, we can look at a company's total sales and decipher pretty quickly whether or not consumers are satisfied with a product or service or aren't. Apple's (AAPL 2.44%) iPhone is a great example. Based on the 39 million-plus iPhone's sold last quarter, which handily topped estimates, we can clearly see that consumers' desire to own Apple's latest gadgets is still intact. There's a reason Apple's lines stretch around the corner of its stores when the company releases new products.

Yet, comparing the loyalty that Apple's "cult" of followers exhibits to the iPhone to the loyalty consumers exhibit with other brands hasn't always been cut-and-dried ... until now.

Breaking down brand loyalty
Recently, Brand Keys, a New York-based research firm that uses proprietary analytics to measure customer engagement and brand loyalty between consumers and the brands they buy, released its 18th annual Loyalty Leaders List, which ranks the top 100 brands in terms of customer loyalty and engagement.

Source: Apple.

Brand Keys' research whittled 721 brands across 65 categories into a list of the top 100 loyalty leaders by interviewing more than 43,000 adults aged 18 to 65 to better understand their buying habits. As Brand Keys noted, 36 of the top 100 brands were completely new to the list this year, which demonstrates that consumers' loyalty to a brand can change at the blink of an eye, and that brands need to be constantly innovating in order to capture the public's attention.

One thing, however, was quite clear with Brand Keys' findings: technology and social media drive the highest customer engagement and loyalty. With the exception of Dunkin' Donuts, whose parent company is Dunkin' Brands, at the No. 10 spot, the remaining 19 of the top 20 spots were comprised of tech-based or social media-based companies. This really shouldn't come as a complete shock as technology is playing an increasingly important role in our lives. Our smartphones keep us connected outside of our homes, and our cars and homes become more tech-reliant by the day.

Another point to keep in mind is that companies can appear multiple times on the Loyalty Leaders List because they make products across a number of categories (e.g., smartphones, tablets, computers, and so on). Samsung, for instance, appears at No. 9 in the smartphone category, No. 36 for computers, and No. 98 for its HDTVs.

Why brand loyalty matters
"Why does brand loyalty even matter," you wonder?

Source: Flickr user Quinton Doroquez.

To begin with, loyal customers often deliver the best margins for a company. Loyal customers don't require sales or special deals in order to purchase products or services, which is precisely why Apple, which doesn't offer sales, is so successful.

Also, loyal customers offer free advertising for a business. Loyal customers are happy with a product or service and aren't afraid to tell their friends and family that they're satisfied. 

Finally, loyal customers also keep a company on track by providing quick and actionable feedback. If something is amiss, loyal customers aren't quick to switch to a competitor, but will instead offer guidance to a company on how best to improve their product or service to compete against their foes.

The surprising brand that trumped Apple
Yet, and this might be hard to believe, in spite of Apple's cult-like following it was dethroned in 2014 as the loyalty brand leader (Apple's iPad took the No. 1 spot for brand loyalty last year).

Would you care to venture a guess as to which brand ousted Apple from the top spot before reading any further?

Source: Amazon. 

If you guessed Amazon (AMZN -8.43%), then perhaps tonight is the night to purchase that lottery ticket!

Although more than five dozen categories were involved in Brand Keys' brand loyalty analysis, the top two spots came down to tablet-makers Apple and Amazon, with the two switching spots in 2014 (Amazon's Kindle Fire tablet ranked second last year). Why the swap in positions? 

I suspect convenience plays a factor in Amazon's No. 1 ranking. Let's keep in mind here that Amazon is first and foremost an online e-tailer, and its primary allure is that you don't have to leave the comfort of your home to shop. With the company's own line of electronic gadgets tied in intricately with its marketplace Amazon has created a seamless pathway by which its most loyal users can be exposed to its e-readers and tablets. It's a fantastic marketing model that's working pretty well.

Of course, Amazon is going to need more than just its No. 1 ranking among the 2014 Loyalty Leader List to send its shares higher in this uncertain market environment, but it's a good start for a company that continues to steadily add to its loyal customer base.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of, and recommends and Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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