Multiple Ways of Measuring Brand Loyalty

Recently, DuWors and Haines (1990) developed a new measure of brand loyalty based on event history analysis. They measure brand loyalty as the time until a consumer switches to another brand for the first time. This measure is an improvement since it can be applied for either static or timedependent loyalty. However, there are also problems. The measure does not consider competing-risks although their data contain multiple brands. More importantly, heterogeneity is not allowed for, which may lead to biased results and spurious state dependence (Heckman and Singer 1984). What appears as time-dependent loyalty may be an artifact due to aggregating consumers with heterogeneous purchase probabilities. In addition, they only consider the time until the first switch. This may provide a deceptive picture of loyalty if brand switching is frequent in a product category.