What is brand loyalty?

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A brand is only as successful as the amount of customers it can attract and, more importantly, keep. 

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What is brand loyalty? 

A brand is only as successful as the amount of customers it can attract and, more importantly, keep. With studies showing that repeat customers spend 31% more than new customers, the rewards are worth the effort of building valuable relationships. For advertisers, building strong links with their customer bases can result in engagement that grows in value as people return time and time again.  

What is customer loyalty? 

Simply put, customer loyalty is when a customer builds a positive association with a product or brand to the extent that they repeatedly purchase from them, choosing them over competition. A customer who is truly loyal to a brand will continue to purchase regardless of price or the latest trends, but to achieve such devotion among a customer base, a brand must put in the work too. 

Why is customer loyalty so important? 

Building customer loyalty has numerous benefits, not least the fact that a loyal ecommerce customer is around 60% more likely to make a purchase compared to a brand new one. It’s also key to making sure that there’s demand for those key sales periods such as Christmas, Black Friday, and Cyber Monday.  

Here are just some benefits to building customer loyalty: 

  • Word of mouth referrals — if a customer is happy, they will recommend you to others, and that means free marketing for your brand. 
  • Increased trust — even the most well-known brands need to earn the trust of their customers and, if you can nurture the ones you already have, then you can create customers that feel a sense of security with you they don’t want to lose by going elsewhere.  
  • Increased awareness — a happy customer who wants to shout about their positive experience leads to glowing positive reviews, social media posts showing off their purchases, and potentially  extra followers on your social media accounts too. 
  • An audience to analyse — by gaining a real, authentic audience that is ready to respond to your products, services, and posts, you can get a clearer idea of what your target market is interested in.  

What types of customers are there? 

Even within your loyal customer base there are different sorts of personas that you need to consider. This is why making a dedicated effort to establish and nurture repeat customers should be considered equally as important as acquisition so you can appeal to them all: 

The simply satisfied customer 

This type of customer may seem like the easiest type to keep — their experiences with your brand have always been positive, and they have never had reason to complain. However, this is the base expectation of many customers for any given brand. Being able to achieve the bare minimum doesn’t mean that satisfied customers, while likely to return, will remain loyal if tempted by a better offer from elsewhere. 

The fickle customer 

But that’s not a bad thing. To a degree, almost every sort of loyal customer is basing their decisions on factors that could easily be surpassed by competitors. But there are some customers that are loyal to you purely for the effort you put in to keep competitors in their place. This sort of customer will respond strongly to freebies, special offers, and exclusive deals. That may mean they don’t contribute to your revenue on a regular basis, but their enthusiasm for your deals can spur greater word of mouth referral. 

The customer loyal to price 

You only have to look at high street shops like Poundland and Primark which continue to thrive despite not offering an online shopping option to see that price can be key when it comes to loyalty. While it’s relatively easy to know what these customers want (the lowest price) it can be a difficult balance to strike when it comes to revenue and nurturing relationships.  

The customer loyal to convenience 

This is the sort of loyalty that makes Amazon Prime such a winner, even if the products for sale aren’t necessarily the cheapest around. If you can save customers time and effort, then your brand may pip others to the post, even if you aren’t able to compete in terms of price tag. Convenience can mean different things, from free delivery to easier ways to pay, such as with Klarna 

The 100% loyal customer 

The most valuable type of all, a truly loyal customer will stick with you no matter what. Most likely this customer started as one of the above profiles, but through repeatedly positive experiences, has become a genuine devotee of your brand.  

How to measure customer and brand loyalty 

Measuring customer loyalty can be done in several ways, and most businesses will need to keep an eye on all of the below metrics to make sure their customers remain satisfied.   

Customer churn 

This is the rate that customers leave your company i.e. end the possibility of becoming loyal customers. But you should also look at the opposite of churn, known as negative churn — this shows how many return customers you have retained, and you obviously want to keep an eye on this to make sure it stays high. Our TalkTalk case study shows the importance of churn when it comes to measuring your success. 

Social media mentions 

It’s not just about what you say to your customers, what your customers say about you can play a huge role in your retention rate. Keep an eye on social media both for positive and negative mentions, and if a problem crops up, be sure to respond with a solution. This public engagement and willingness to fix problems count as big plusses when it comes to building trust.  

Customer retention rate 

This refers to precisely how long customers stay with you and is a good metric to watch if you introduce new loyalty marketing tools and want to track their performance. Ideally, this metric should always be steadily climbing. 

Customer effort score 

This metric measures your customers' satisfaction in clear terms. Most commonly this data is collected through surveys such as follow-up emails that ask customers to rate their experience from 1-10 and share any feedback. This is an excellent way to see the impact of your business on your customer base in emotional terms and is also extremely valuable when it comes to identifying customer problems with UX and UI. 

How to build customer loyalty 

No matter how well a customer fits into the above profiles, every part of your brand has a role to play in securing their loyalty. For example, one customer may be most interested in your deals, but if redeeming an exclusive offer means navigating a buggy site or facing a disinterested customer service team when issues arise, even the most generous discount may fall flat.  

Be blatant about rewarding loyalty 

Most people are sure to have a few loyalty cards in their wallet. People like being rewarded for their time and money, so make it easy for customers to know when and how they’ll be rewarded for their loyalty to you. Whether it’s a free cup of coffee or a points system they can redeem as purchases, making an easy-to-join loyalty program will give customers plenty of reason to return.  

Consider loyalty marketing 

A huge portion of company funds for marketing goes towards acquisition instead of nurturing customers they already have. Change this by making your current customers an equal priority. Consider a rewards app, an exclusive web portal, or newsletter that has a little more heart to let your customers know they really are valued.  

Align your values 

People stay loyal to brands for different reasons, and it's not always the obvious ones like price.  In fact, studies have shown that one of the most important factors is sustainability, with over half of shoppers around the world citing it as highly important when it comes to their buying decisions. The change in people’s buying mindset is something businesses must keep up with, and in an authentic way, or you may risk losing trust. On that note… 

Be trustworthy 

This goes for your general marketing — don’t over-promise or say you’re delivering on things you can’t — but it also goes for other channels. Your customer service should always be genuine, so customers are engaged with a real person who talks to them like a human and doesn’t just read off a script. You should prove you know and value your customers with newsletters and social media posts where you are always transparent and honest. 

Keep one eye on customers and yourself 

Of course, maintaining customers means you always have one eye on your customer base, but you also want to look at the wider picture. What are the trends of the moment? What new brands and products might tempt them away? Where is your brand falling short on the areas you know your customers value? Always work to evolve your brand in the best interest of your customers, by fitting not just their budget but also their values and lifestyle, you can become a trusted, irreplaceable part of their shopping journey. 

What is a customer loyalty program? 

A customer or brand loyalty program is, as the name suggests, a program that rewards customers for shopping with you repeatedly and a key sort of loyalty marketing. There are different models your customer loyalty program can take, but the goal is the same — to encourage customers to return time and time again. Customer loyalty programs include: 

A points system 

A tried and tested model, a points system rewards customers by giving them points with every purchase. Once they have accumulated enough points, they can use them to purchase an item. While many global brands use this approach, it can also mean a lack-lustre points system is something customers will quickly realise is below par. Make sure your reward points are worth the effort of collecting them, for example, 1 point per 10p, rather than a convoluted system (e.g. points that contribute to a coupon which can be redeemed within a select period) that may put customers off.  

A paid system 

This one does require a bit more groundwork in order to build enough trust that customers are willing to pay for a premium experience. However, these loyalty systems are able to deliver on multiple fronts. They can increase convenience through things like a discounted yearly charge for unlimited delivery, allow for exclusive online portals and deals, and priority access to help, sales, and other offers. A paid system needs to give customers value for money, and deliver on the sense of exclusivity expected of a fee-based program.  

A laddered or tiered system 

This is most commonly seen in things like frequent flyer programs where the more customers spend over time, the more they are rewarded as they move up the ranks of a tiered system. High-value purchases like flights and accommodation often use this model, as the competition in terms of price and convenience are widely the same, and customers must be tempted in different ways.  

A partnership system 

As demonstrated by the Wolverhampton Wanderers’ brand partnership program, a partnership program rewards customers with perks that stretch beyond your own offerings. This also helps build customer trust, as these partnerships can help boost your credibility through collaborations with brands customers may already fully trust and rely on. It also gives the impression that you truly understand and value your customer and their needs. For example, the Wolverhampton program recognised that travelling fans may need accommodation, and offered deals based on this need.  

Making loyal customers into affiliates and advocates for your business.

Happy customers will be happier to shout about your business and recommend it to others. While reviews and social media posts are priceless for this sort of promotion, advertiser tools can help you connect even more with affiliates and audience members. By giving them the power to gain more than just points from promoting brands they care about, the customers you already have don’t only bring value with each repeat purchase, but may also be your secret marketing weapon. 

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