The tendency of customers to purchase one brand’s products over another continuously is Brand loyalty. It is a pattern of consumer behaviour through which consumers get committed to a particular brand or product and make repeated purchases over time.
Organizations with strong brand loyalty observe THAT their customers frequently purchase their products or services, despite the changes in price or convenience. Loyal customers potentially turn into open advocates and brand ambassadors for a firm.
Example: Walmart and Amazon have some of the most loyal customers.
Benefits of Loyal Customers
- Repeat Purchase, eg. Walmart.
- High-Profit Margins, eg. Apple.
- Competitive edge in the market, eg. Gillette.
- No effect of Price Change, eg. Nike.
- Easy entry of new products, eg. Cadbury.
- Leads to Advocacy, eg. Xbox.
- Better brand recognition, eg. Lego.
- Protection against reputation blows, eg. Samsung Note 7 Scandal
How to Build Brand Loyalty
1. Interact with Customers
Connecting customers directly with company employees is extremely motivating for customers to come back to the same brand. End users can offer concrete proof of the positive influence of the company’s products and services, express recognition for employee contributions, and evoke empathy.
Listening to customers is essential in customer relationship management.
Example: Lego Users Group Network – LUGNET & Xbox Ambassadors.
2. Develop Loyalty Programs
The programs are designed to acknowledge customers who frequently buy in substantial amounts.
These programs can help in building long-term loyalty with high customer lifetime value members and creating cross-selling opportunities in the process. Established by the airline industry, hotels, and credit card companies, loyalty programs now exist in many other sectors.
Example: Sephora’s Beauty Insider Program.
3. Brand Consistency
Consistency plays a vital role in building brand loyalty.
Customers prefer brands that deliver their promises every time and not just when it’s convenient.
Example: McDonald’s is one of the most successful brands in the world, and one of the hallmarks of the chain since Ray Kroc started his franchise expansion has been that – a McDonald’s in New York is the same as a McDonalds in Indiana or India.
4. Attractive Logo & Design
Logos and design components must look the same on all devices and browsers.
Colours represent a brand’s personality and give visual expression to the feeling, mood or role the brand is trying to elicit. With that in mind, the colour palette is also important.
Apple, for example, is particularly consistent with its use of white colour throughout its entire brand palette in order to evoke purity, simplicity and elegance.
5. Use Influencers to promote the Brand
Brands can build loyalty by having celebrities promote their product or service; for instance, Kim Kardashian’s product endorsements on Instagram.
After reaching stagnation, brands can indulge in advancing their engagement with the customers by turning to influencers on social media channels for building the brand’s loyalty.
Example: Michelle Lewin.
6. Personalize the Customer Experience:
One of the great ways to increase customer loyalty is to make the customers feel that the firm not only understand their needs but also cares about them on an individual level. This can be achieved with the help of personalization.
Example: Ritz Carlton.
7. Focus on User Generated Content:
It is basically any kind of content, such as pictures, illustrations, videos, text, and audio that is posted by users on technological platforms such as social media. Here, it is the consumers that act as advocates of the products and helps the firm in marketing them.
Airbnb’s survives on UGC. Airbnb has built a unique community commodity model There are a special trust and bond between the traveller and host – which is precisely what has users saying, “this is better than any hotel I’ve stayed in.”
Once a traveller experiences the feel of this community, they become a lifetime client.
Case Study – Amazon Prime
Launched in 2005, Amazon Prime has become a global loyalty program that boasts more than 150 million members.
It offers a selection of perks, including express delivery of groceries and other items, access to an extensive catalogue of TV shows and movies, as well as exclusive discounts at Whole Foods stores.
Amazon Prime members, who pay $119 annually in the US buy more often and spend more on Amazon than non-Prime members do. These customers also don’t indulge in price comparisons across competitor sites.
Case Study – Walmart
‘Walmart+’ – Walmart’s Paid Membership Program. Walmart planned to launch a new subscription service in September 2020 called ‘Walmart+’ that costs $98 a year.
This program has promised to include perks like same-day delivery of groceries and general merchandise, discounts on fuel at Walmart gas stations, and early access to product deals.
Walmart first intended to launch Walmart+ in March 2020, but after the Covid-19 pandemic began sweeping across the US, the retailer postponed the date to September 2020. Walmart+ is Walmart’s strategy to take on Amazon’s Prime Membership Program.
Case Study – Apple
Apple’s Ecosystem and Brand Loyalty. Apple holds an industry-leading Net Promoter Score, and its share price has increased more than threefold in the last 5 years.
According to Fluent, “Apple is the gold standard for practical innovations”. The number of customers loyal to the brand is said to develop from a tightly integrated and often locked type of ecosystem, which means that as people indulge in buying more Apple devices, they are more dedicated to the brand.
Moreover, Apple has mastered advocacy, whereas Microsoft tends to focus on more conventional marketing.
Advocacy, also known as ‘grassroots marketing’ is nothing but building product equity and awareness through users and word of mouth.
People nowadays are far more prone to believe a product or service recommended by a friend than from a shop assistant which forms a much stronger loyalty towards the product after it has been bought.