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Brand Loyalty is Brand growth

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Brand Loyalty is Brand growth

What Is Brand Loyalty?

Brand loyalty is the positive association customers attach to a particular brand, whereby the brand has a higher than-usual share of the basket. Customers who demonstrate brand loyalty are not devoted to the product but are more likely to repeat purchases even in a highly competitive environment. Of course, some consumers are obsessed with specific brands. Still, they do not necessarily represent the so-called brand loyalists: think of the difference between loyal Coca-Cola consumers and Coca-Cola brand memorabilia collectors. Building brand loyalty is much more about the first group than the latter.

How Brand Loyalty Works

Loyal customers are the ones who buy the same brand with a certain degree of disregard for price or convenience. But loyalty to a brand is often demonstrated in subtle choices, like a natural preference for one delivery app, airline, or retailer. Companies use many tactics to create and retain brand loyalty by focusing on so-called loyalty programs, but this post is not about that.

Brand loyalty: why is it important?

Brand loyalty happens when consumers resonate with the brand, and it is salient in their memory. Brand loyalists are more likely to have deeper and stronger bonds to their preferred brands by making them the ideal target consumer and customer. The nature of that bond is not transactional. The effect of that bond is on repeat purchases, but that is one – almost collateral – aspect.

Unfortunately, the paradox of “loyalty marketing” is the focus on the transaction. In loyalty marketing and rewards mechanisms, instead of focusing on consumers who don’t need to be persuaded because they already enjoy the brand, the emphasis is on building repeat purchases through exclusive discounts via loyalty programs.

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How to create brand loyalty

While forgetting about loyalty programs, there are four levers driving brand loyalty.

1) Focus on the Experience

Many companies extensively map their customers’ journeys but then use them from their point of view, not their customers. Marketers can look at these maps with the lens of opportunity to hit their targets with more promotional messages or by addressing customers’ pain points and hurdles. And those issues often originate in the process-driven, outside-in view of the world that organizations have.

2) Give your brand a voice and story

NikeID voice and story would be something like this:

“I will create an app that allows you to customize your shoe based on your taste. You’ll be able to choose what kind of shoes you want, how big you want them to be, and even if you want to wear socks. Then you can upload pictures of yourself wearing the shoes, and we’ll generate a pair that fits you perfectly.”

Nike shares inspiration with its audience through compelling storytelling, such as using striking imagery every day. They attract people who resonate with their messages by sharing inspiring stories about athletes and sports. They do so to build bonds, not price promotions.

3) Build a community

A community manager once told me, “To build a thriving and tight-knit online community, you need a strong base of loyal followers who will spread the word about your product.”

The truth is quite the opposite. It would be best if you built a community of kindred spirits who share your values and interests, and then bonds would emerge between the members of the community and the brands who get it right. A community must prescind from transactional objectives.

When community members feel trust and a bond with the brand, they will be willing to share information about your brand, post positive reviews, and even help promote your business by sharing your content. But, more importantly, they will recruit their peers to your brand among their networks.

CorePower Yoga created a massive community of people who think yoga should be joyful and enjoyable. Their community-oriented class and studio classes generate a sense of belonging. People feel a sense of community because they get to know each other and become friends. When community turns into brand loyalty, you have a loyal customer base. CorePower Yoga instructors regularly bring their community together by hosting events. These events allow people to meet each other and form friendships. Taking the community offline is a great way to create a sense of camaraderie among your customers.

4) Using social media to nurture a relationship

In a transactional world, Social Media Marketing is used to increase brand awareness, improve customer experience, and drive sales. Your transactional social media strategy should include goals like increasing brand awareness, improving conversion rates, and creating a better customer experience.

Social media nurtures the community and listens to their feedback, comments, and concerns in a community sense. Social media can be a way to stay in touch with a distant friend who shares your values.

The long-term impact of brand loyalty

Loyalty programs are great ways to get people to buy your products or services, not drive honest brand loyalty.

Brands like Nike, Coke, Pepsi, and even Jaegermeister have a rich myth status with loyal consumer bases. Do you think temporary price discounts and freebies drive their bond with consumers?!?

Brand Loyalty is Brand Growth because it ticks all the marketing KPIs:

  1. lower acquisition costs, longer customer lifecycle
  2. higher transaction size and share of purchase within the basket
  3. responsible for Net Promoter Score
  4. drives recruitment through consumer ambassadorship


Frequently Asked Questions

How do companies measure the effectiveness of their brand loyalty strategies?

Companies measure the effectiveness of their brand loyalty strategies by analyzing several key performance indicators (KPIs). These can include customer retention rates, which show how well the brand retains its customers over time, and repeat purchase rates, indicating how often customers return to buy the brand’s products or services. Other metrics like Net Promoter Score (NPS), which gauges customer willingness to recommend the brand to others, and customer lifetime value (CLV), estimating the total value a customer brings to the brand over their relationship, are also crucial. Surveys and feedback can provide qualitative insights into customer satisfaction and loyalty levels, complementing these quantitative metrics. Consumer goods companies measure it as a Share of Purchases, through panel data, for example.

Can brand loyalty survive major brand controversies or crises, and if so, how?

Brand loyalty can survive major controversies or crises, but this largely depends on the brand’s response and actions. Transparency, accountability, and genuine apologies are critical in addressing the issue head-on. Brands must communicate clearly with their customers about what happened, the steps to resolve the issue, and how they plan to prevent similar situations. Committing to making things right can help retain customer trust and loyalty. Additionally, leveraging a solid foundation of brand loyalty built over time can help a brand weather a crisis, as loyal customers may be more forgiving and supportive if they believe in the brand’s values and integrity.

What role does customer feedback play in shaping and maintaining brand loyalty over time?

Customer feedback is instrumental in shaping and maintaining brand loyalty, providing direct insights into customer experiences, expectations, and perceptions. By actively listening to and engaging with customer feedback, brands can identify areas for improvement, innovate based on customer needs, and make informed decisions that enhance the customer experience. Acknowledging and acting on feedback demonstrates to customers that their opinions are valued and considered, fostering a stronger emotional connection and loyalty to the brand. Continuous improvement driven by customer feedback can lead to higher satisfaction, encouraging repeat business and positive word-of-mouth, which is essential for long-term brand loyalty and growth.

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