Brand loyalty can be described as the tendency for customers to favour one brand, consistently, above its competitors, even when new purchasing opportunities expose themselves. Brand loyalty and customer retention go hand-in-hand, and are profitable goals for businesses to target. After all, attracting new customers with higher brand visibility is nice but unless they stay with you, you may only see a short-term boost in revenue.
Brand loyalty was common several years ago, as consumers put their faith in specific businesses to handle their needs in multiple categories — they consistently bought vehicles from the same manufacturers and got groceries from the same stores. But is the concept of brand loyalty dying? Have consumers lost the desire to remain loyal to individual brands?
There is some evidence to suggest that brand loyalty is dying — for example, 90 percent of common household goods brands are losing market share in certain low-growth categories. And logically, it makes sense that brand loyalty would be dying, for the following reasons:
1. The information age
Thanks to the internet, consumers have access to businesses all over the world. They have more choices than ever before and more information to make those choices. So, it’s only natural to assume they’d start choosing less expensive, more convenient products over products produced by their favourite companies.
2. Corporate distrust
Many people across the world trust corporations less than ever before. It is not uncommon to find many businesses breaching ethical and moral responsibilities. That missing trust may be preventing them from investing too heavily in any one big business.
Recent Research: Two Types of Brand Loyalty
However, recent research done by Facebook suggests that brand loyalty is alive and well. The company surveyed 150,000 adults across the world, examining patterns of behaviour across multiple different verticals. Across the board, 77 percent of consumers have the tendency to return to their favourite brands, over and again. However, those 77 percent seem to be split into two main categories:
Brand loyalists make up 37 percent of the population. They make repeat purchases and are truly “loyal” to their favourite brands, meaning they would not switch given an opportunity like lower prices or more convenient access.
Repeat purchases make up the remaining 40 percent, and represent people who make purchases at the same brands, frequently, but only because they give them an optimal experience. Given lower prices or more convenience, they would have no problem switching brands.
Brand loyalty isn’t dead, but it has diversified. Brand loyalists are driven by emotions, at least to some degree, when going back to their favourite companies while the repeat purchasers are driven solely by function. Obviously, the emotional ties are stronger and harder to break, but as long as you can appeal to both categories, you’ll be able to retain a hypothetical 77 percent of your customers.
Do you think that this 77 percent belongs to mostly older generations, with the majority of impulse-driven, information-age-born millennials bouncing from brand to brand? Actually, the opposite is true; millennials seem to be more loyal to brands than any other generation. This is thanks, in part, to their interactions with brands on social media, as well as their high regard for company values like corporate social responsibility.
Driving More Brand Loyalty
Brand loyalty is neither a dead nor a dying concept, so how can you increase it for your brand, specifically?
a. Personality
First, understand that people don’t forge relationships with companies as easily as they do with other people. Millennials are frequent brand loyalists because they have personal, meaningful engagements with brands online. If you want to inspire that kind of loyalty from your customers, you need to be prepared to give a similar personal experience. Have real conversations with your customers, and try to address their unique individual needs whenever you can.
b. Loyalty programmes
Loyalty programmes can also be an effective way to encourage repeat purchasers (and start fostering the emotions necessary to recruit brand loyalists). Essentially, you’ll offer your customers rewards — including discounts and freebies — for buying more things from your brand. Just be choosy about what you provide in your loyalty programme — a surprising 78 percent of people recently surveyed end up jettisoning loyalty programmes after they sign up. You need to make it worth their time, if you want them to remain with you.
c. Reliability
Next, remember that people choose brands consistently when they want to have a consistent experience. You need to give them that reliably consistent experience, if you want them to keep coming back. That means the quality of your products, the quality of your service and even your brand voice need to be carefully controlled, for all your customers.
d. Brand communities
Finally, foster better brand associations and memories by developing interpersonal communities around your brand. These can include things like online forums, meetups or even social groups connected to your brand. Social connections are easier to foster than brand connections but your brand will earn the benefits here.
Last line
Brand loyalty is not a lost concept nor is it likely to disappear anytime soon. Brand loyalty is necessarily different today than it was even a decade ago. Nonetheless, with the proper understanding and right approach, any business can secure more loyalty from its customers.