What is Brand Loyalty and How Can You Build It?

8 minutes

Brand loyalty is a coveted trophy for all businesses, large and small. 

By definition, brand loyalty is a consumer’s emotional decision to strongly favor a brand and make repeated purchases because they perceive that the brand understands their needs.

They don’t need heavy convincing because they already enjoy your products and distinctly prefer them, even to competitors with similar offerings and lower prices.

Everybody has brands they are loyal to. It could be their local coffee shop. For others, it may be the pub down the street. You might even feel connected to a brand you haven’t purchased from but are still interested in. Trust is the most common source of that pull.

Think about some of the brands you favor.

What drives those preferences? Is it good service? Is it about the price point? Is it the experience? Is it a combination of all three?

People like to shop consistently for brands they can trust, and that preference is why you need to engender loyalty from your customers.

The benefits of brand loyalty

The advantages of brand loyalty include:

  • Free advertising from your satisfied and loyal customers in the form of word of mouth
  • A competitive advantage in the marketplace
  • Repetitive purchasing of your products
  • Higher sales and profits
  • Lower possibility that loyal customers will be impressed by your competitors

Customer loyalty vs. brand loyalty

Customer loyalty rests on the quality of your products/services. To earn customer loyalty, your brand must satisfy customer expectations and serve their financial needs. You can, for example, increase customer loyalty by using the right pricing strategy and discounts.

Brand loyalty, on the other hand, is driven by a consumer’s connection to your brand. Loyalists are influenced by factors other than the products or services you offer. To build brand loyalty, you must connect with your customers on a personal level.

=> Loyal customers say, “I believe in your product,” while brand-loyal customers say, “I trust your brand.

Bottom line: Brand loyalists are your dream customers. Creating brand loyalty isn’t easy, but it’s well worth the effort.

People prefer to shop with trusted brands.

How do consumers define brand loyalty?

These statistics from a recent Yotpo survey of 2,000 U.S. consumers found that:

  • 36.5% of shoppers stated that they would spend more on products if they were loyal to a brand.

Brand loyalty is not something that just happens. You need to keep working to maintain your position in your customers’ hearts, minds, and wallets.

Why are consumers loyal to your brand?

What motivates customers to stay loyal?

Brand advocacy conversations can be complex. Some brand characteristics or behaviors are more likely than others to result in positive online word-of-mouth promotions, but the subtleties are often nuanced. But it’s clear that today’s consumers expect more from brands than ever before.

Here are some key areas that contribute to winning your audience over:

1. You have a high-quality product.

If your product isn’t great, it isn’t easy to build brand loyalty. Although consumers may be spending less these days, research shows that people are still happy to pay more for quality.

Consumers who advocate for brands stay loyal to them because they offer high-quality products at fair prices. This also motivates them to promote these brands via social media.

2. Your audience has positively engaged with your brand before.

People are always looking for human interaction in a virtual world, so engaging with your customers can make a huge difference. These are the moments that ignite connection and emotional responses.

You can create a lasting impression for your brand by interacting with customers directly, whether they are on social media or behind the counter. Asking for feedback is a great way to do that. You’ll not only show your concern for what is important to them, but you’ll also be able to hear suggestions and proposed product improvements straight from your customers.

Keeping your word can win trust as well.

3. You have excellent customer service.

Bad experiences drive customers away faster than you think.

Did you know that 65% of U.S. consumers consider a positive brand experience more critical than great advertising? [via PwC

Or that 73% of consumers believe experience is an essential factor in making their buying decisions?

Even if you have the most innovative product around, you won’t get very far without excellent customer service. Customers want to feel valued when doing business with you.

Top 3 reasons consumers call out brands on social: Dishonesty, bad customer service, and rudeness.

Imagine losing one-third of your customers in a single day. For good. Because that’s precisely what could happen after just one bad customer experience. PwC also found that in the U.S., even when people love your company or product, 32% would stop doing business with you after just one bad experience, and 59% would walk away after several bad experiences.

If you provide your customers with a great experience, they’ll buy more, be more loyal, and share their experience with friends. And repeat customers are better than new customers by far.

So treat each of your customer interactions as a chance to earn loyalty. Frustrated customers don’t want to ruin your day — they’re simply people who have a problem they’re trying to solve. So listen, adjust, and repeat.

How can you build brand loyalty?

Let’s now move on to the final piece of the puzzle. We’ve looked at the key drivers of loyalty. We understand the benefits. So how do you build a loyal base for your brand?

1. Engage your customers

Without customer engagement, brand loyalty is impossible. It’s like asking for a promotion at work without actually doing your job.

Engaging with your customers and followers can help you build a sense of community and belonging. Use social media to notify customers about new trends, special offers, and your company’s next steps. Your customer interactions should feel like conversations.

While it takes effort and time to build meaningful relationships with customers, the rewards are incredible.

More than 65% of the 1,000 people surveyed by Customer Thermometer said they felt an emotional connection with a brand that cares about them. The majority of these connections were positive (over 90%) across several industries. Fewer than 10% expressed feeling a negative emotional connection with a brand.

And according to Harvard Business Review, customers who have developed a bond with a brand are extremely valuable. These “fully connected customers” are 52% more valuable, on average, than highly satisfied customers and are less price-sensitive.

Reach out, nurture, and retain the customers who really boost your bottom line, and brand loyalty will come naturally. 

2. Keep an eye on the prices you charge for your products.

Price and value are important considerations for customers making purchase decisions. In addition, customers are more likely to advocate for your business if they receive value for their money.

Other ways you can increase customer value:

  • Offer discounts for returning customers to spur future purchases.
  • Encourage customer referrals to combine the power of word-of-mouth marketing with brand loyalty.
  • Set up a loyalty program to continue engaging your brand with customers and encourage repeat purchases.

3. Be reliable and trustworthy.

Brand reliability is one of the critical factors of consumer trust, which your brand needs to succeed. It’s based on the belief that your brand can achieve its value proposition and satisfy customer needs. In its most basic form, reliability is the expectation that your brand will consistently perform as envisioned by the customer.

Notions about brand reliability evolve in the same way that people form trust in interpersonal relationships. That is, trust grows in a newly formed relationship based on the consistent and predictable actions of the participants. We come to trust people who act per the expectations we have of them. Likewise, when the products we use from a brand perform reliably, we come to trust the brand — and become loyal to it.

If you want to invest in long-term relationships and foster recurring customer purchases, reliability is central to your success. People are not going to repurchase anything from brands that perform unreliably and are deficient in customer satisfaction. But, on the other hand, when your product works day in and day out, your customers will come to trust your brand.

4. Listen to and learn from your customers.

Your customers want you to hear them, so listening to them is vital to creating brand loyalty.

Understanding customer pain points and what delights them will help you stay ahead of potential problems and ensure that your products and services are improved accordingly.

Think about how you can turn these conversations into lessons learned. Feedback should be part of every interaction you have with your customers.

Building brand loyalty is worth your time and effort.

Today, the name of the game is choice. Consumers have more information at their disposal than ever before and do their research before buying. They choose brands that are trustworthy and ethical. They are adamant about quality and price.

Retention is essential for every business. However, loyalty can be hard to win, especially when one bad experience can be shared with other customers in just a few clicks.

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