There is a high chance you have some products or services that you favor over the others. Would you be surprised if we tell you that 36,5% of shoppers said they will spend more on products if they are loyal to a brand even if the cheaper options are easily available? The extensive research on the topic of brand loyalty showed the impact loyalty has on the growth and sustainability of any business. Let’s walk over the key features of brand loyalty which can get you frequent and loyal customers in no time.
What Is Brand Loyalty and Why Is It Important
Brand loyalty represents the positive emotional association consumers attach to a specific product or a brand. No matter the competitor’s efforts, a loyal customer stays devoted to a product or service of their choice. They demonstrate that by repeating purchases, despite the numerous, more affordable, or accessible options.
Consumers are loyal to a brand because they believe you offer a better service and higher quality than anyone else. Such consumers are rarely triggered by the price. If any brand offers more than one product or service under their name, a loyal customer is likely to, at least try them all out, if not buy and use them all regularly.
The consumer perceives that the product meets their expectations and identifies with it on a personal level. When a brand is in question, the buyer behavior is built on trust that the product will meet those expectations.
We mentioned the emotional charge between the customer and a brand. A consumer feels that the brand fulfills some kind of physical need in a unique way. For example, using a specific brand of toothpaste. While you are using a brand you love, you feel safe that your teeth are protected and clean at all times. However, if your brand is unavailable, negative emotions and insecurities might occur just from the thought that you will have to switch to another toothpaste brand you don’t fully trust.
Did you ever go to the store and couldn’t find your brand? A true brand loyal customer wouldn’t immediately take a substitute product, but would rather visit another store, searching for their special product. This is what separates a frequent buyer from a loyal customer. How would you feel and what would you do if your brand is sold out? Would you immediately reach out for the substitute brand, or would you visit another store? How do you feel about imagining using another brand? It is uncomfortable or weird? Answers to these questions will help you out determine if you are loyal to your brand or not.
If your brand is sustainable, it can survive unexpected changes in the market. Whether there may be a recession at the macro-level or a corporate re-organization at the micro-level, your brand can still thrive. You can count on loyal customers to keep buying your brand and spreading the positive word around. Brand loyalty is an indicator of quantifiable measurement of your brand’s success and predictions for the future.
Customers who are loyal to your brand work as your ultimate marketing channel. Imagine the number of people they will inform about your brand. Family, members, friends, co-workers, all of them are potentially new buyers. Hopefully, they will become your new loyal customers. This will not only positively reflect on your sales, but also your customer base. All things, considered, that will give you a competitive advantage over similar brands.
An empirical research study has determined five characteristics of brand loyalty. Those include customer perceived value, brand trust, customer satisfaction, repeat purchase behavior, and commitment.
The History And Statistics of Brand Loyalty
In the previous century, the market functioned differently. Let’s take a step back and observe how brand loyalty came about and how it changed over time.
At the time before the 1950s, all it took for you to be successful was to have a quality product. There was no much competition, and people didn’t care about the brand, just the quality. Consumer behavior was different than today. It was more directed to the quality and price, and less to the brand.
During the 1950s, product quality improved across the board. Unexpectedly, the competitor products emerged. That was a clear sign that you had to do something to stand out. This is the era when marketing ideas were born. The fight for the customers has begun and it hasn’t stopped to this day.
In the 1960s, a new wave of highly competitive products took the spotlight. This is when the product branding took a massive step forward. Companies and businesses started investing in branded packaging, promotions, and advertising.
In the 1980s, the first loyalty programs emerged. That was the big change on the market and it paid off significantly in the early days. Today, 90% of companies offer loyalty programs. It is estimated that adults are exposed to an average of 360 brand messages per day!
Now, to showcase the significance but also the representation of brand loyalty for the business, take a look at the current statistical data regarding brand loyalty as a concept.
One research asked the respondents to say what they know about brand loyalty. These are their definitions of brand loyalty:
- 67,8% of the respondents define it as a repeat purchase
- 39,5% of the respondents define it as “love” for the product
- 37,7% of the respondents define it as a preference of one product over the other despite the price
As we mentioned already, brand loyalty is more than a repeat purchase. About 36.4% of survey respondents reported that they don’t consider themselves brand loyal until they’ve made five or more purchases from a brand.
Millennials, on the other hand, usually follow their parents’ footsteps, more precisely 63% of them. Interestingly, 78% of them say brands today have to work extra hard to earn loyalty than they did to earn their parents’ trust.
The Impact of the Internet on Brand Loyalty Today
Before the digital age, the way of building loyalty was through the interaction of the salesperson and a customer. Consumers are nowadays more empowered to conduct independent research and compare competitors’ offerings.
As the choice is unlimited, companies shift from a brand-focused agenda to a customer-centric model. To gain market share and retain customers, emphasis is placed on building customer relationships, providing excellent customer service, and delivering value.
Social media accounts can promote the brand, enhance its customer relationships, and accept feedback. Reading reviews have become common before buying a product or a service. The brand is accessible to a massive pool and it has never been easier to reach potential customers.
The downside of this is the high competition in almost every industry and niche. It is hard to stand out from the mass. One way to win in this cyber competition is by knowing how the internet works, what is SEO, and how to optimize your content for the best result. Despite your brand’s quality, if you can’t get your webpage on the first page of the Google search results, you will feel it in your brand’s performance and profits.
What are the Types of Brand Loyalty
To dissect brand loyalty further, these are the 5 types of profiles of brand-loyal customers you might meet. Knowing these types of brand loyalty will help your company build a better relationship with its customers and give back to the community in return.
1. Hard-core loyal customers
This is the profile of a loyal customer you want to have. They are overly excited regarding a particular brand and their experience and customer satisfaction with it is nothing but perfect. The likelihood of those customers shifting to another brand due to a minor issue are minimal. Furthermore, such customers are prone to spread the word around, convincing others to buy a product.
Good examples of hard-core brand loyalty are big smartphone companies such as Samsung or Apple. “Fans” are ready to cash out a serious amount of money to buy the latest smartphone. Those customers should be appreciated for their loyalty and support towards the company.
2. Split loyal customers
Split loyalty refers to those who love more than one brand but limit their choice to two or maybe three brands. Companies are focused to convert split loyal customers into hard-core loyal customers. Most of the time, such customers prefer one brand over the others, but will not hesitate to spend money on others from the shortlist, as they had only positive experiences with them. Customer behavior data of this type of consumer will give you an insight into who are your biggest competitors and what strategies they use to attract customers.
3. Shifting loyal customers
Shifting loyal customers will buy products from one brand over a certain period and then switch to another brand. As of that moment, they will become loyal to that other brand. Shifting loyalty customers have more limited loyalty than split loyalists. You can say it is their habit to be loyal to one brand for some time but just shift to another option after some time. Retaining such customers is hard, but not impossible.
4. Switching loyal customers
At first, it may seem there is no or little difference between shifting and switching customers. Switching customers are seeking even more diversity. They like to explore and try out different products. It is hard to “control” those customers as their spending habits and motivation are unpredictable. What you can do to impress them while they are buying your products is providing exceptional customer support and experience.
5. Need-based loyal customers
The customers in this category are driven towards a particular brand by a specific need. Their motivation is usually revolving around the price, a specific need, or an occasion.
You can try to convert them to loyal customers but it has been proven that it is easier to retain current customers than to attract new ones. Focus on giving your absolute best to the first two groups. You want to retain them at all costs. The next two types of customers need an additional push to become truly loyal to your brand. We’re not saying that you should disregard need-based loyal customers, but their spending habits, motivation, and customer profile differ from the rest of the types you should be focusing on.
5 Advantages of Brand Loyalty for your Business
A strong brand can help you and your customers. Here are the 5 benefits you can leverage from implementing brand loyalty strategies.
1. Customer recognition and brand image
Consumers will always trust well-known brands. If your brand can get the attention of consumers, you can be certain that some of them will become one of the previously mentioned types of loyal customers. Your products or services are recognized as valuable, competitive, and reputable. Accessibility of your brand can also be an invitation to consumers to discover other products and services you might be offering. All that accounts for the inevitable benefits both in terms of customer retention, as well as profitability.
2. Competitiveness in the market
It is hard to stand out among hundreds, if not thousands of competitors’ products. Think about what makes you different from them? What services or benefits do you offer to new customers? How can you continue being competitive in the market? What marketing strategies you can and should implement for the best results? Don’t forget to run a competitive analysis of your competitors. See what they are doing. Avoid their mistakes and learn from their success.
3. Easy introduction of new products
If you have a group of loyal customers who are devoted to your brand, any new product you create will be welcomed with anticipation and delight. Use the sample group or your loyal customers to test new products and ideas. Listen to their feedback and improve if needed. Once you have a reliable and big enough group of brand followers, you can easily promote and present new products. Such products will get lots of attention early on and their market trajectory to success can be astonishingly fast.
Customers are attracted to brands that they share values with. When you build a strong brand, you need to convey these values to build an emotional connection with customers. Once they are emotionally attached to the brand, customers will not pay as much attention to the price and they will close their eyes in case of some potential issues with the product. Be clear about what your brand stands for. That will attract like-minded customers and a strong standpoint will build a brand image over time.
5. Enhanced credibility and ease of purchase
Having a strong, well-known brand enhances your credibility with customers, your industry, and the marketplace as a whole. Customers will see your brand as a big and successful figure in your industry or niche. People want to buy from companies they like, know, and trust. If your brand is credible, you’re far more likely to get the sale. Customers will not question your product or make assumptions about it based on what they’ve heard about it.
How Do Brands Earn or Lose Customer Trust
All relationships are built on trust. The customer trusts the brand will deliver the expected quality. Moreover, customers feel the brand needs to meet their expectations to earn their trust. On the other hand, the brand trusts the customers will stay loyal, buying the products and not looking for alternatives.
In what ways brands can gain the trust of customers? One idea that gives results includes putting customers first, instead of the profit. Once customers see that a brand prioritizes relationships over sales, they are more likely to trust the brand. Furthermore, the presence on social media gives additional exposure to your brand, its features, and how it relates to its customers. It also leaves a space for the audience to leave their feedback. Potential customers can read reviews of current customers.
A brand must build its reputation on transparency about its goals, values, ideals, and practices. What does this include? First of all, it means having integrity in one’s dealings with customers and employees. Also, it points out to owning up to failures and mistakes, learning from them, and never repeating them.
Losing customers’ trust is dangerous for brand loyalty
Why would someone leave a brand? The reasons vary from customer to customer. Sometimes, they just want to try something new or test new products. Maybe someone recommended them another brand. There is also a possibility that they had a negative experience with a brand. It is not unusual the brand just stopped meeting their expectations as well.
You need to have in mind that customers’ needs and interests change over time. If possible and needed, change your strategies accordingly. When a company ignores consumer trends, it might lose brand-loyal customers. That could result in the decline of the potential profits of the company.
By all means, avoid scandals as they massively hurt the brand’s reputation. The negative image in the media will hurt the credibility of the brand. If that, by some chance happens, honesty is the best policy. Be transparent and admit the mistake. Customers will value the honesty on your side.
Brands must keep in mind if they break confidentiality, there is no chance those customers will return. Keeping personal information in a safe space must be a priority no matter what.
Don’t make false promises. If you promise delivery within three days, make sure it gets delivered within three days. If you deliver it after a week, the trust will be lost. Brands that under-promise and over-deliver benefit and enjoy the loyalty of their customers.
A little tip: If you know you need three days to deliver the product, promise the delivery within five days. When a customer gets the product on the second or third day, they will be delighted and impress with the efficiency of your service.
See how this information can help you build your brand and enhance the quality of your business.
