Top 10 Reasons Customers Choose Competitors Brands
Do you ever wonder why some brands are more popular than others? It could be because they deliver better value or are more fun to use, but it’s also often down to the simple fact that they offer more choice.
We’re all aware of customer loyalty—the reason why we stay with one brand for years, sometimes decades. But, it’s not always about brand loyalty. According to a recent survey by Ipsos, customer loyalty is one of the most common reasons people choose to switch brands.
And according to another recent survey, customer loyalty is an essential part of the marketing mix. These two facts alone should give you a good idea of how important customer loyalty is for business owners and marketers alike. So what can be done to strengthen the customer loyalty aspect of your marketing strategy?
This list is based on an extensive survey of over 5,000 customers and brand leaders across six markets—all industries. These top 10 reasons why customers choose competitors brands over their own have been proven time and time again to be true.
1 – They’re better looking
There’s a common assumption that people select the brand of product they want based solely on what it looks like. But the truth is that the vast majority of people choose based on other factors, including price, packaging, warranty, social media buzz and other brand attributes.
While many of us think we’d prefer the cheapest coffee on the market, that’s often not the case. The same applies to smartphones and TVs. People often choose the best-looking product simply because it looks the best.
Customers like brands that make them feel good. These brands make the people who use them feel comfortable and satisfied. To some, this is just good business. But there’s a growing theory that you need to start selling yourself based on something other than your product to attract more customers.
Here’s the thing: You may be surprised at how many brands of coffee your competitor’s brand tastes worse than yours.
They don’t care about the competition; they care about the brand.
While many business owners may think it is necessary to compete to survive in today’s market, the opposite is true. Customers choose competitors brands because they don’t care about the competition; they care about the brand.
If a company has a reputation for delivering exceptional service, people will pick that brand over their competitor even if the price is lower.
I think this is the most underutilised resource in our marketing toolbox. We focus so much on the competitors and trying to beat them that we don’t ever take the time to look at what makes our brand different from the others.
The reality is that most people don’t really care what brand you’re selling. Instead, they’ll tell you, “I just need something that works.” When we focus on the customer and what they need, it becomes straightforward to tell them what they need to solve their problems.
The problem with competitors is that they’re all focused on the same things that consumers want: convenience, speed, and price. Consumers don’t care about those things. They care about solving their problems. We can develop something different that they haven’t even considered yet when we start there.
2 – They offer a cheaper price
Customers often choose products offered by competitors brands because the products are cheaper. This is referred to as “price discrimination,” and consumers do it all the time.
This behaviour occurs because consumers are price-sensitive and think lower prices mean lower quality, even though little evidence supports this belief.
The most common way for consumers to purchase is through the physical retail channel, but there are many ways to buy that aren’t physical. For instance, consumers who have money in their bank accounts may be more willing to pay by credit card. Others may choose to pay through PayPal or Amazon Payments. However, consumers are likely paying the same price for whatever you’re selling.
So, if you want people to buy your products and services, the best thing you can do is provide a higher quality, lower price.
They want to feel they are getting a better deal than what they are paying at other stores.
There are two sides to the equation: the amount of time the customer spends looking at price versus the overall amount of money they spend at the store.
If the customer feels like the item or service is worth more than what they’re paying, they’ll probably spend more time looking at the price tag. So, if you can offer a significantly cheaper item than what customers are paying elsewhere, they’re likely to pay attention.
3 – They have a more trusted brand
Research shows that people are much more likely to trust something they already know and are familiar with. So if you’re looking to persuade your audience into choosing you over a competitor, you need to have a recognised and trusted brand.
But that doesn’t mean you can’t change that perception by starting from scratch. Just make sure you are putting in the work to build a trustworthy brand.
The most common customer behaviour that leads to a competitive advantage for companies is choosing a competitor when there are no alternatives. This phenomenon is known as the “invisible hand”.
In many industries, customers may have several options to choose from, but they often choose competitors brands without hesitation if there are no obvious choices. This may be due to a perceived level of trustworthiness that customers associate with a particular brand or the convenience of being able to purchase just one trip to the store.
Customers want to feel comfortable with their decision.
If you read the previous tips, you may already know this, but it’s a great reminder. We’ve established that there are three psychological principles at play here:
- Urgency: To feel an urgency, consumers need to believe that buying now is the best option for them.
- Scarcity: To feel scarcity, consumers need to believe that buying now is the only option.
- Comfort: Finally, the customer wants to feel comfortable with their decision. They don’t want to feel rushed into a decision, and they don’t want to feel pressured to make a decision they’re not happy with. They want to know that whatever decision they make will work out well for them.
4 – Their products are better
Many people, especially those in the retail business, think that customers only buy their competitors brands because they’re cheaper, offer free shipping, or are more convenient for the consumer. They’re wrong.
The truth is that customers buy brands because they perceive those brands to be of better quality. It could be the company’s reputation in the industry or because they better understand the brand. However, it always comes down to the fact that the consumer is looking for the best value and that the product is the best for them.
They may have tried the competition and were dissatisfied with the outcome. Alternatively, they could see that their friend was having success with the brand and are curious to see what it’s all about. It could be a myriad of reasons people choose one product over another, but when people buy competitors brands, it’s usually because their products are better.
They want to know the quality of the products they are buying.
Many people admit that they only purchase from the ‘big brand’ brands. In fact, according to recent research, this preference is so deeply rooted that even when people know the products and services they are purchasing come from smaller companies, they still often prefer those companies’ products.
Even if they have access to the same information about the company’s size, quality, and the like, they still prefer the prominent brand over the small.
Why? The answer is simple: consumers think that a big brand has more trustworthiness and authenticity than a small company.
5 – Their brands are more relevant to their target market
Consumers may choose to buy products or services from competitors if their brand is more relevant to their target market. Brands that are too different from a consumer’s needs are likely to fail in their efforts to persuade customers to purchase.
If your brand is just like the competitors brands, there’s little incentive for customers to buy your brand. To avoid this pitfall, you need to find a way to provide customers with the value they seek while making your brand stand out from the competition.
- Are you talking about a problem your audience has?
- Is your brand representative of a solution they need to solve?
- Can you show them how your brand is better than the rest?
- Are you a brand that your audience wants to associate themselves with?
- If you are, why? What makes you uniquely different?
They are interested in new brands.
New brands have more potential for growth than established brands. Customers will switch to newer brands if they don’t have a clear preference.
If a brand isn’t differentiated, customers will choose another brand that is. Consumers are less likely to choose a brand with little differentiation than a differentiated brand.
6 – They offer more ‘value’
If we’re comparing products and services, value tends to be a more significant factor than price. As a result, a company’s perceived value may be more important than the price of its product.
“It’s not about the lowest price. People buy cheaper products because they’re looking for more value,” says Dr Michael Norton, author of Norton on Marketing, a guidebook designed to help people become better marketers.
I’m always surprised when people don’t choose brands that give them more value for their money. I’ve often found that people don’t choose the products they like the best because they don’t see a massive difference between their brands. But brands that give you more value for your money are worth spending your money on.
They are looking for value-added.
Value-added means that the consumer finds the product or service worth the cost. In the case of brand loyalty, we’re talking about something bigger than just cost—we’re talking about value-added.
Value-added refers to the additional benefit that the consumer receives in choosing a particular brand over another. For example, an energy drink costs $4.00 and has no value-added to a regular soft drink.
7 – They give more freebies
“Freebie marketing” refers to giving customers something for nothing, such as discounts, free shipping, and promotions. Sometimes, these products or services are intentionally marketed for free to win over consumers, but sometimes they aren’t.
A great example of this is how Starbucks offers an extra shot of espresso (for free) to anyone who orders a tall iced coffee during certain times of the day. This strategy is an excellent example of freebie marketing. It’s also why customers choose their competitors’ products.
Think about your own buying behaviour. Do you notice yourself choosing a brand because it gives you something extra? Is it because they’re cheap or have a special offer?
These reasons drive sales, and freebies aren’t just free anymore. Free means you’re getting more for less. But consumers don’t just like freebies; they also want brands to give them more than they’re paying for. Free is free, but more is better.
They are interested in seeing where the new brand is being positioned.
As a business owner, you can use this knowledge to determine what drives your target audience to choose your competitors brands over you.
This is a good thing because it shows that your market research is on point, and it should be driving you towards your next steps.
If your product or service is just that good, people will choose it over others. But if your competition is providing better value to your target audience, you need to take note and do something about it.
8 – They offer better customer service
Customer service and reputation often cite reasons consumers select certain brands over others. If your brand offers a superior product and service, you’re bound to attract more customers than your competitors.
Consumers prefer to deal with companies that are more responsive to their needs. If they have a problem with your brand, they will call you or contact your competitor directly.
So, how do you win over those customers who prefer dealing with a larger company? You must be sure that your customer service is top-notch and your competitors aren’t.
For many years, the theory behind why people choose certain brands over others was that they prefer brands with a long history.
The customer would say, “I like Apple products because their quality is always consistent. I like Coke because I know it is made using high-quality ingredients.”
Many other theories exist about brand loyalty, but this one isn’t entirely as accurate as it used to be. There is no solid evidence to prove that customers will choose brands that offer better customer service over brands with a long history.
They want to know the customer service options.
In a 2021 survey conducted by Forrester Research, 61% of online consumers said they chose the company from which they purchased something based on its customer service reputation.
While many brands offer excellent customer service, the study revealed that nearly half of the respondents said they chose the company they purchased a product or service based on its reputation.
9 – They have better content
Customers choose their competitors brands because they have better content. The main reason customers choose their competitors brands over your own is that they have better content.
A content marketing expert explained it: “The content they are seeing is something they’re interested in; the customer is not reading through all the stuff you’re sending them.”
When crafting your content, another point to remember is that a strong brand is always preferable to a weak one. Consumers are drawn to content with higher quality because they value information. Strong brands attract high-quality information providers.
When consumers hear about your brand, they don’t automatically assume it’s a good brand or an excellent company. But if they read something positive about your company or read your brand name somewhere, they’re likely to form an impression that sticks with them.
They are interested in learning more about the company.
The customer is in the driver’s seat. They’re the ones who decide if the brand’s message resonates with them. Your job is to keep them engaged long enough to hear it. The longer they hang around, the more likely they will return and read more.
Any company looking to use this technique has to realise that the value proposition is more than just the fact that the company is an expert. Instead, they should be offering something else that is unique or interesting. They have to sell themselves as experts, or they’ll never succeed.
10 – They have higher conversion rates
In other words, if customers can choose the brand that’s best for them, they will choose the brand with the highest conversion rate.
The more brands there are on the market, the easier it is to choose the one that’s best for you. So how do you position your business against its competitors?
The key is to position your company as a trusted source of information. By highlighting how you’re better than the competition and helping people select a product that’s best for them, you help differentiate your brand from your competitors, creating more traffic and sales.
This isn’t hard to believe if you consider that some of the world’s most successful companies had humble beginnings. While many might look at these businesses with envy or awe, we should also remember to give them credit for their success.
They were able to come out on top of so many competitors because of their high market share, but rather because they excelled in converting prospects into customers.
They want to know the prices before they commit to purchasing.
Another reason why it’s crucial to have a competitive price for your product or service because people will often take advantage of you if they feel that you’re overcharging. For example, if I want to buy a car, I’m likely to ask around to see what deal I can get. But if I see that someone else is selling a car for less, I’ll likely want to go to them and buy their car instead of yours.
This is the same logic that applies to other products and services. Most consumers like to know prices before they make a purchase. So, you should give your potential customers a reason to pick you over a competitor. A low price could be one reason why you’re their favourite.
I’ve learned a lot about customer service, product pricing, and product design over the last couple of years. I’ve found that customers want a brand experience to engage with the company directly through social media, online communities, and other touchpoints. And for some brands, customer service alone isn’t enough.
To create a truly memorable experience, a brand needs to be authentic and transparent. They should be willing to answer any questions that customers have about their brand and offer genuine, personalised support. And they need to be committed to staying connected with their customers and creating long-term relationships with them.
The success of a business is directly related to how much it knows about the markets it serves. A company unaware of what is going on in the marketplace is doomed to fail.
But, at the same time, it’s essential to avoid being too focused on short term gains at the expense of long term strategic growth. This is why I am so passionate about understanding what makes your brand unique and how you can build the most valuable and trusted brand in your category.
Don’t be the brand you want to beat; be the brand customers will choose above the rest.