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The News About Consumer Loyalty Is Worse Than You Imagined

The average brand lost a third of its formerly highly loyal customers in 2008, according to an analysis study conducted by the CMO Council and Catalina Marketing's Pointer Media Network. The two-year study looked at 685 brands, using data compiled from the loyalty cards of 32 million consumers, Andrew Edgecliffe-Johnson reports.

That's bad news for brand marketers who count on their best customers for most of their profits. In fact, brand managers and retailers who have seen the data have been startled by it, according to Todd Morris, svp at Catalina.

"Defection is top of mind for brand managers now because they're the most profitable customers," says Eric Anderson, associate professor of marketing at Kellogg School of Management, Northwestern University. "Price and promotion have become so salient at retail, that what we thought was the loyal customer can be moved with discounts."

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