One of the first things a business consultant will emphasize to a client, in terms of importance, is brand loyalty. Therefore, that very subject is at the forefront of most successful companies, such as Sam’s Club. Some people view Sam’s Club (the corporate entity) as a bit of a trust fund baby, obviously, since it is a subsidiary of deep-pockets WalMart. Looking at brand loyalty, though, one cannot help but notice that no other “Big Box” store maintains its customer base with as much financial adhesive as Sam’s Club. This is despite our modern-day social media bombardment of advertising, literally, by all means.

The Temkin Report
The latest market research report, the 2012 Temkin Loyalty Ratings, places 206 companies – across 18 different industries – under the microscope. They measured loyalty using three keys: Likeliness to recommend a company, reluctance to switch to a different company, and likelihood of repeated or continued patronage. Grocery chains, fast food restaurants and retail stores ranked at the top of the loyalty list (Not surprisingly, banks and credit card companies occupied the bottom tier, never mind those institutions that have loans for people with bad credit). Sam’s Club placed first in the rankings, followed by the grocery outlet Aldi and then insurance giant USAA.

Proof in the Pudding Aisle
Aldi, as many folks know, is a discount grocery store that carries little-known (sometimes imported) brands. And USAA insures former military personnel and their families, a built-in industry niche if ever there was one. The high rankings of those two companies makes sense in terms of loyalty (Aldi’s is cheap and USAA caters to a sizeable existing clientele), but Sam’s Club claiming the top spot is something that may puzzle many junior economists, as does the American nuclear family’s compulsion to buy in bulk.

The real consumer irony is that Sam’s Club charges a membership fee to its customers. The memberships are simply for sale; they’re not contingent on one’s credit score. If one shops quite a bit at Sam’s Club, one could reclaim (through cost savings) that expenditure and then some, as the company proves regularly with annual savings statements that they mail to their members. A single favorite item, be it beer or coffee or butter or burritos, can be had – in bulk – at such advantageous prices as to pay for an annual membership in just a few trips. Sam’s Club shoppers may well determine that the rest of the year’s savings after that will be so much icing on the cake.