Brand Loyalty: How to Turn Customers Into Diehard Fans (Part 1)
Alireza Abbasi
Let's discuss business growth strategies and explore innovative trends in product management and design.
Brand loyalty is one of the truest signs of a successful business.
Why?
Because it means you’ve got customers who are willing to pay more and buy more often (even when your competitors offer better quality at a lower price).
Customers who will proudly tell their friends and family about you.
Customers who simply won’t settle for any other brand.
That’s the power of brand loyalty.
But what is brand loyalty, exactly? And why is it so essential to the growth of your business?
In what follows, we’ll take a look to the answers to each of these questions and more.
We’ll define brand loyalty, look at some brand loyalty examples in some of the world’s most successful brands, and show you how to build brand loyalty that will turn your customers into diehard fans.
CONTENTS
What is Brand Loyalty?
Brand loyalty is the allegiance that drives a customer to faithfully return to a brand’s products or services, regardless of competitive factors like price or convenience.
Brand-loyal customers are buying more than products or services. They’re buying a reliable experience, a way to express themselves, membership in a tribe. In a word, they’re buying a brand.
Brand loyalty is closely tied to brand affinity, which is when a customer believes a brand is aligned with their values or worldview.
What’s the Difference Between Customer Loyalty & Brand Loyalty
Key to any brand loyalty definition is the difference between customer loyalty and brand loyalty. While the two ideas are often confused or used interchangeably, there are important differences between them. Let’s break them down.
Customer loyalty is a transactional relationship based on prices.
Loyal customers have decided that the things you offer meet their needs within their budget. They’re satisfied with your offerings and are likely to return, unless they come across another product or service that provides equal or greater value at a better price. Customer loyalty can be fostered through incentives like discounts, rewards programs, and targeted marketing.
Brand loyalty, on the hand, is an emotional relationship based on experience.
Brand-loyal customers identify with your brand on a personal level. The value they get from your products or services goes beyond features or benefits. Buying your products or services says something about them—not just as a customer, but as an individual.
Most importantly, brand-loyal customers are very unlikely to be persuaded away from your brand by the promise of better prices—or even better quality!
Brand-loyal customers make purchasing decisions not from a rational or pragmatic perspective, but from an emotional one.
Take a Coke drinker versus a Pepsi drinker. Blind taste tests have shown that even the most loyal Coke drinker can often be confused as to which soda they’re tasting. You might conclude that there’s little difference between Coke and Pepsi in the minds of consumers.
But try telling that to a brand-loyal Coke customer! They’d probably look at you like you had two heads.
The same could be said for brand-loyal Apple customers versus Samsung customers. Or Ford versus Chevy.
Brand-loyal customers simply aren’t interested in the real-world differences between their choice and the alternative. Or they’re willing to sacrifice on price or quality for the irreplaceable feeling they get from their favorite brand.
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The Benefits of Brand Loyalty
You’re probably starting to get a sense of why brand loyalty is so valuable to your business.
It’s one thing to have a loyal customer base. It’s another to have a cadre of fans that would simply never consider buying a different brand. That’s the mark of true brand affinity.
Let’s take a closer look at why brand loyalty is important by unpacking a few of the most tangible benefits of brand loyalty. Especially when it comes to moving the needle on your business’s growth.
Boost Profit & Revenue
In terms of your business’s bottom line, there are few things more valuable than brand-loyal customers. Brand loyalty is proven to result in lower customer acquisition costs, more referrals, and higher new-product adoption rates.
A study by Harvard Business Review found that businesses with high loyalty scores were able to grow their revenue 2 ? times faster than their competitors. The same study found that brand loyalty translates into 5 times more shareholder returns over 10 years.
Brand-loyal customers are also usually the most enthusiastic early adopters. Nielsen found that 3 in 5 people say they’d rather purchase a new product from a brand they know than from an unfamiliar brand.
Increase Customer Lifetime Value
Brand loyalty is especially relevant in a modern world where customers are bombarded by advertising and marketing all day long, at every turn.
Our attention spans are shorter than they’ve ever been; we’re constantly distracted by shiny new things in every channel, from our email inboxes to our social feeds to the shelves at brick-and-mortar stores.
Despite the noise in the marketplace, more than two thirds of U.S. customers report that they’ve remained loyal to a brand for 10 years or more. That’s how powerful brand loyalty can be.
According to one study , a 7% increase in brand loyalty translates into 85% higher customer lifetime value (CLV). Lifetime brand-loyal customer mean reliable repeat purchases with zero acquisition costs.
Foster Sustainable Business Growth
The type of business growth that brand loyalty leads to isn’t just impressive, it’s sustainable over time. This is because brand loyalty tends to compound over time.
The more familiar we are with a brand, the more likely we are to trust it. The more we trust it, the more likely we are to purchase it. Another way to look at it is, the more a brand delivers on its brand promise, the more loyal we become.
Not only do brand-loyal customers tend to spend more than other customers, especially over the lifetime of their relationship with a brand, they’re less price-conscious than other customer, as well.
Key to sustainable business growth is the ability to raise prices without the risk of losing customers. This combination of customer retention and pricing power is exactly what brand loyalty provides.
Increase Marketing Efficiency
One of the most underrated benefits of brand loyalty is the fact that it makes your marketing efforts infinitely more efficient.
Why? Because every brand-loyal customer you have is like a prism that magnifies your promotional messaging tenfold.
As proud brand ambassadors, brand-loyal customers are more likely to repost your social media content or simply tell their social circle about how much they love your products or services.
One survey found that almost 60 percent of brand-loyal customers refer friends and family to their favorite brands.
There’s nothing more powerful than word-of-mouth marketing. Psychological research proves that we are uniquely swayed by social proof. When other members of our tribe have had a positive experience with a brand, we’re much more likely to try it ourselves.
Part 2 - Coming soon ...
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