NEW YORK — The True Value brand is ranked among the best brands when it comes to consumer perception of trustworthiness in the home improvement retailing sector.

The 2013 annual ranking of brands with the highest customer loyalty was released by market researcher Brand Keys this month. Some 400 brands in 54 categories were measured by 39,000 American consumers from 18 to 65 in its 17th annual Customer Loyalty Engagement Index.

Among licensed and franchised chains, True Value hardware stores is ranked first. What is surprising is that at one-thirty-third the revenue of Home Depot's $70 billion, "the best hardware store in town" is playing a close game with the big box hardware superchain. According to Brand Keys, both firms hit home runs in brand loyalty and are within just a few narrow points of each other on the Customer Loyalty Engagement Index.

Here are the customer loyalty rankings of the hardware brands.

Retail Store (Home Improvement)

1. Home Depot
2. Lowe's
3. True Value
4. Ace

What is so unusual about True Value is that the chain's 3,000 owner-operators of 5,500 stores own and run their licensor. The store owner-operator members (some might say franchisees) have stock in the company, sit on the board of directors and give the brand its operating instructions. In return, True Value store owners receive cheaper products, a trademark that commands strong brand loyalty, new business formats, operating standards that are constantly tested, field support visits, learning at True Value University and a training system for store owners' employees.

"True Value invests in programs to support the retailer’s operations and customer experience," wrote management  in its 2011 annual financial report to its store-owner shareholders.

Why does having strong brand loyalty matter?

Investors who purchase a hardware store that hangs an established trademark outside want to make sure that they receive the most bang for the buck. After all that they can do, they want a brand that can bring in loyal and repeat customers for the dollars that they pay in the form of royalties and ad funds each month. As if to show just how well True Value knows their shareholders, in their 2010 annual financial statements to store owner-operators the words traffic and store are used frequently around branding initiatives. For example, it says about an online branding intitative: "Another way True Value helps retailers increase store traffic is TrueValue.com."

Why pay for a brand that falls flat with consumers and does little to bring guests in the door?

"The brand whose drivers come closest to meeting or even exceeding those of the category ideal is always the one whose customers will demonstrate the highest levels of engagement and loyalty over the next 12 to 18 months," observes Robert Passikoff, founder and president of Brand Keys.

Passikoff reminds marketing leaders to see if they are engaging consumers in the right emotional place. "If you know where that emotional engagement is in your category, you'll know not only how consumers will behave, but most importantly, you'll know what will get them to behave more positively toward your brand versus your competitors," declares Passikoff.

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