There seems to be a lot of debate in recent times about loyalty towards brands. Have a look at this U.S. research, undertaken earlier this year, which outlines a gradual decline over the years. Needless to say that we business people, all strive to have loyal customers because usually, they buy more and refer more. So how do we address the problem of decline?
In our opinion, there have been two developments that businesses need to accept in this digital age. Firstly, that technology has raised the customer’s expectation of a two-way street with regard to loyalty. Reciprocal loyalty is becoming the norm not the exception. Secondly, it should be appreciated that loyalty is about emotions in the first instance and behaviour in the second.
Often, businesses use loyalty programmes to measure success, which are based on behaviour. The trouble is that these can’t measure any emotional factor involved. And we know that it is the emotions that drive the purchase decision and repeat business.
In fact, I would go so far as to say that I, as a consumer, consider loyalty programmes to be a reward for my loyalty. I’m sure there are marketing directors out there that think the opposite.
We outline some tips below that might help address the emotional side of a customer’s loyalty to your brand. At this point, though, we would like to make the distinction between brand loyalty and customer loyalty.
Brand Loyalty vs Customer Loyalty.
In our minds, brand loyalty is where customers return to buy the same product but will also try other products/services proffered, because of their positive experience.
Customer loyalty, on the other hand, is achieved through special offers, rebates and other incentives to increase the volume/frequency of purchases. This usually equates to an increase in footfall but also to short-term profitability.
Perhaps a simpler way of distinguishing these terms is that customers who are brand loyal are loyal to you, the business. Those in loyalty programmes are loyal to their own wallet.
Whilst there is nothing wrong with the latter, from a sustainable business point of view, brand loyalty is usually the better of the two.
It is, of course, perfectly acceptable to concentrate on both, but in the absence of brand loyalty – competitors such as a low-cost producer can easily attract your wallet loyal customers.
For the purpose of this post – we are going to talk about brand loyalty. The research, mentioned above, inferred that in this connected world, brands have the increasingly difficult challenge of changing from broadcasting messages to building relationships.
More than ever, people have many options and many ways of connecting with brands. As a method of choosing one over the other, they seem to be siding with companies that share their own beliefs and/or priorities. Accordingly, it really is imperative that businesses communicate their own brand values to an audience that shows an affiliation to same.
As the socio-economic environment continues to evolve, it appears that sustainable business will be built on brands that provide meaning to customers. Here’s the hard (?) bit – brands have to genuinely like their customers i.e. treat them as humans rather than wallets.
Why does this seem to be so difficult? We think it is because 1) not only does there have to be a change in the business mindset but 2) brands have to ensure that they can connect wherever, whenever and however their customers want to and 3) do so in a relevant way.
As a result, marketing must move away from asking, ‘what will our company say to our customers’ – and get to, ‘what is our company to customers.’
Marketing must move away from ‘what will our company say to our customers’ and get to, ’what is our company to customers.’Click to tweet
Some people think brand loyalty is for suckers.
We could not write this post about brand loyalty without reference to lifehacker.com’s great read – ‘Brand Loyalty is for Suckers’. In it they discuss headings such as:
Brand Loyalty Locks You Into Willful, Lazy Monopolies
Brand Loyalty Encourages Fan Worship
Brand Loyalty Makes Products Worse
Brand Loyalty Uses You as a Weapon and Encourages Blind Consumption
It really is well worth a read and poses food for thought on the subject. In this post, however, we are approaching the topic from a business point of view. And as such, we believe that to succeed, brands must strive to be ‘more popular’ and relevant than their competitors. In the next section, we outline some ways that we think might help better your company’s popularity in the brand loyalty world, but not to make suckers out of customers.
Tips and Timesavers.
We can safely assume that all marketers, and indeed business people, will accept that it’s more expensive to acquire new customers than to keep existing ones. In both instances, however, the earlier you start to work on earning their loyalty, the better.
Such loyalty can often manifest itself through a gratitude and appreciation of what a company stands for.
What can you do to earn this gratitude?
- Live your values to the full and communicate them.
- Over-deliver on customer experience and use testimonials / social proof.
- Create a community of like-minded people and help them as an expert.
- Offer incentives but don’t forget your existing customers.
- Admit your mistakes.
- Get personal and stay in touch – remind them of the value you offer.
- Create something that they want to be a part of – inspire them to live a better life.
- Have the right employees (fully trained etc.).
- Ask customers for their feedback (especially after a sale).
- Be reliable and make their life easier by anticipating their problems.
- Make it easy for them to communicate with you / a real person.
- Remember it’s the little things that matter – surprise them.
Most businesses would believe that brand loyalty is something that happens after you acquire a new customer. The reality is beginning to show that people are aligning themselves with brand values rather than products/services.
Surely, therefore, it makes sense to address this in advance. As a start-up business, you should know your brand values. Thereafter, communicating these values at every brand touch-point will facilitate such activity as referral marketing programmes. This activity can do a lot of the spadework in advance of the actual prospect conversion activity.
There are many tools and channels available for brands to engage and create positive experiences (e.g.social media, networking, traditional marketing). There should be no excuses for not making prospects and existing customers feel connected to your company.
The real challenge going forward is to be authentic when demonstrating that you have their best interests at heart. Loyalty IS a two-way street.
“Thank you for reading our blog post today” – Aidan & Jim.
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