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Brand loyalty is a term widely used within marketing, sales and businesses of all sizes. It’s important because brand loyalty ensures that customers choose your brand’s products over others’. Such consumers are likely to enjoy your products and stick to them despite whatever else your competitors promise.
Loyal customers are the ideal buyers for any business. However, building brand loyalty requires dedicated effort and consistency.
Keep reading if you’re looking for tips on how to build brand loyalty.
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What Is Brand Loyalty In Marketing?
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Why Is Brand Loyalty Important?
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Types Of Brand Loyalty
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Benefits Of Brand Loyalty
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How To Build Brand Loyalty
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Final Thoughts
What Is Brand Loyalty In Marketing?
In simple terms, brand loyalty refers to a phenomenon where customers continue to purchase your product or service because they trust you more than other businesses with the same offering.
Brand loyalty comes from a competitive price point, exceptional service, an easy user experience, customer rewards and many other such factors. Consumer loyalty is important for any business because it ensures a steady customer demand, increasing profits.
Why Is Brand Loyalty Important?
A recent 2021 survey found that almost 82% of participating organizations believed retaining a customer is far cheaper than acquiring a new one. This goes on to show that brand loyalty helps reduce the cost of doing business. The same survey also found that 65% of an average organization’s business comes from purchases made by existing customers. To top it off, the survey found that increasing customer retention by as little as 5% could potentially boost profits by as much as 25% to 95%.
In a highly competitive or saturated market, the benefits of brand loyalty are unparalleled. Moreover, when customers are satisfied with the products or services you offer, they’re more likely to recommend you to potential customers. A study by Motista also discovered that customers who felt emotionally connected to a brand were likely to spend almost double of what the average customer would.
Brand loyalty is also a great indicator of your brand’s success in the market. It shows that your business is not only serving but also delighting customers. All of this ensures that you remain competitive in the market.
Types Of Brand Loyalty
Not all forms of brand loyalty are equal. Let’s take a look at some of the most important types of brand loyalty for any business:
1. Brand Recognition
While answering the question ‘what is brand loyalty,’ many marketers often leave out brand recognition. However, before a consumer can form a concrete impression and be loyal to your brand, they first have to differentiate and recognize it. Once brand recognition is achieved, customers begin associating certain products to your brand. They may also think of your brand as unique or special compared to competitors.
When you think of bigger brands that have built a legacy in the market, there’s a higher level of brand recognition. The main reason is that such brands conduct extensive marketing and advertising campaigns to position themselves well in front of their target buyers. However, all types of brand loyalty start from recognition, making it important to invest in boosting brand recognition.
2. Brand Preference
After the brand recognition stage, the next step is brand preference. This refers to a phenomenon where customers pick and choose your brand over competitors, as long as all factors are equal. These factors include price, delivery time, service quality and easy access to products or services.
To bring and retain customers in the brand preference stage, it becomes important to highlight your brand’s unique selling point (USP) and other key factors that can sway users to stay with your brand. One of the most important examples of brand loyalty at this stage would be Apple and Nike. These organizations have built a legacy around exclusive features in their products, resulting in their brand being preferred by many customers.
3. Brand Insistence
The ultimate form of brand loyalty in marketing is the brand insistence stage. At this stage, consumers are so connected to your brand that they no longer see your competitors at the same level as you. Such loyalists help you harness the many benefits of brand loyalty and are likely to remain associated with your brand for a long time.
The different types of brand loyalties are very easily visible in practically every market. Brand loyalty, once built within a consumer, has a number of benefits.
Benefits Of Brand Loyalty
We’ve already answered the question of ‘what is brand loyalty’. We also took a look at its importance and types. Now, let’s understand the benefits of brand loyalty and how brand loyalty can help make your business stable and profitable:
1. Competitive Edge
Brand loyalists are more likely to pick you over the competition, making it easier for your brand to sell, resell and upsell to them. As your brand loyalty grows in the market, your brand name will be elevated, making it seem like you’re better than competing brands.
2. Improve Brand Image
One of the most interesting examples of brand loyalty in action comes from Nike’s iconic Jordans. At the height of basketball legend Michael Jordan’s career, the Nike shoes he wore on the court made millions of young athletes believe that the shoes added to his performance and this belief boosted sales virtually overnight. In this manner, brand loyalty helped Nike improve their brand image and grow into a leading sports brand.
3. Reduce Costs
It’s far cheaper to retain an old customer than acquire a new one, which is why brand loyalists are so valuable to any organization. Because they can bring in more business through recommendations and word-of-mouth promotions, such loyalists help reduce acquisition costs in the long run.
With a strong competitive advantage, easily recognisable brand image, and reduced costs, one can clearly see that brand loyalty has more than one benefit. But how does one build brand loyalty?
How To Build Brand Loyalty
A loyal customer is usually a convert. And this conversion happens through a number of different processes. (caprinow.edu) The different approaches listed here are proven to be the most effective.
1. Offer Excellent Customer Experience
While a great product or service will pique your customer’s interest, only practical, fast and convenient customer experiences will lead them to buy and become a brand loyalist. What is brand loyalty built on, if not for dedicated brand custodians who go above and beyond for the customer’s satisfaction?
One of the greatest examples of brand loyalty in this context comes from the global coffeehouse organization Starbucks. If you aren’t fully satisfied with the way your drink tastes at any of their establishments, you can ask for it to be prepared again, no questions asked! This commitment to customer satisfaction has allowed the Seattle-based brand to expand to over 76 countries.
2. Keep Customers Positively Engaged
Brand loyalty in marketing starts with unparalleled customer engagement. This engagement can be via emails, SMS, social media posts, mailed content or even phone calls.
Interacting with audiences and updating them about new product launches, special deals, new trends, expansion plans, organization culture and other relevant topics helps foster a sense of community, boosting brand loyalty in the long run.
3. Be Reasonable and Reliable
Unless your product belongs to a niche category, price points are always a concern for customers. This is why brands that offer good products and services at affordable rates enjoy the highest brand loyalty. While value for money may not be the only concern for potential customers, it’s certainly an important factor in decision-making. This is why reasonable prices are important when it comes to understanding and decoding the brand loyalty puzzle.
Apart from reasonable prices, it’s important to be reliable as a brand. If you promise something to your customer, make sure to deliver. Additionally, invest in quick shipping, on-time deliveries, quick response times and exceptional customer service.
4. Collect And Leverage Quality Data
Quality data about your customers will allow you to offer exceptional service and unparalleled experiences. The more data you collect, the easier it’ll be to craft relevant offers, giveaways, customizable products or services and relatable communication. All of these factors combine to give your customer a highly-personalized and effective brand experience, leading to brand loyalty.
5. Offer Incentives
While there may be various ways to answer the question ‘what is brand loyalty in marketing’, one thing remains constant. All customers enjoy being pleasantly surprised and incentivized for their purchase decisions and buying preferences.
Offering unexpected incentives on a customer’s birthday, providing discount coupons during peak seasons and sending out free samples of new products show customers that you care for them. These activities show your customers that you remember them and value them, fostering brand loyalty in the long run.
Now that you know why brand loyalty is necessary, let’s find out how you can become a brand that inspires loyalty from its customers. You don’t have to figure it out on your own—with the right guidance, you can set yourself apart from competitors using your customers’ faith in your product.
Final Thoughts
Brand loyalty in marketing is one of the most important aspects when it comes to ensuring business success. While building brand loyalty may seem daunting and labor-intensive, deploying the right strategy can help you achieve your sales, marketing and brand management goals.
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