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The long-term erosion of repeat-purchase loyalty

John G. Dawes (Ehrenberg-Bass Institute, University of South Australia, Adelaide, Australia)
Charles Graham (School of Business, London South Bank University, London, UK)
Giang Trinh (Ehrenberg-Bass Institute, University of South Australia, Adelaide, Australia)

European Journal of Marketing

ISSN: 0309-0566

Article publication date: 25 September 2020

Issue publication date: 25 February 2021

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Abstract

Purpose

The study investigates the long-term erosion of repeat-purchase loyalty among consumers who purchase brands in a one-year base period.

Design/methodology/approach

The study uses a five-year consumer panel of continuous reporters. We identify brand buyers in a base year, then calculate the proportion that fail to buy the brand in later years. We analyse the top 20 brands in 10 consumer goods categories.

Findings

We find pronounced erosion in repeat-buying over the long-term. The proportion of buyers from a base year that fail to buy in a later year increases steadily over time, from 57% in year 2 to 71.5% by year 5. Moreover, we identify brand and marketing mix factors linked to this over-time customer loss or erosion.

Research limitations/implications

The study provides evidence that consumers’ propensity to buy particular brands changes over a period of years, even though those brands continue to exhibit a stable market share. This evidence provides a different interpretation than the literature to date, which has viewed purchase propensities as fixed.

Practical implications

The study finds that store brands and niche brands exhibit lower levels of erosion in their buyer base; that a broad range is associated with lower erosion, and that high price promotion incidence is associated with lower erosion for manufacturer brands.

Originality/value

Loyalty erosion has been reported before (Ehrenberg, 1988; East and Hammond, 1996) but only over short periods. This study examines the phenomenon over five years, confirms that the rate of erosion does diminish over time, and that it is related to category and brand characteristics, as well as marketing mix decisions.

Keywords

Acknowledgements

Author names are in alphabetical order. All authors contributed equally to the work.

Citation

Dawes, J.G., Graham, C. and Trinh, G. (2021), "The long-term erosion of repeat-purchase loyalty", European Journal of Marketing, Vol. 55 No. 3, pp. 763-789. https://doi.org/10.1108/EJM-01-2018-0042

Publisher

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Emerald Publishing Limited

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