Ever wondered why most customers stick to certain brands over experimenting with countless options that are available in the market?
In marketing parlance, this tendency to repeatedly buy products or services from a brand is called brand loyalty. From a business standpoint, brand loyalty is the one the assures customer retention and sales generation in the long run.
Repeat orders and purchases from customers are practically ruled by buying capacity, needs, trends, price and a host of micro and macro factors. However aside from these salient factors that rule govern customers’ buying behaviours, it is the brand value, quality standards and reputation which helps create brand loyalty.
In the past few years customers’ buying behaviours and brand perceptions, competitions and methods of gratifying needs have evolved significantly with the influx of internet, digital and mobile-driven trends, altering the factors that rule brand loyalty. But, its importance to brands and businesses remains unaltered and requires the same level of fervour to add a ‘trust factor’ to the products or services.
It requires the right mix of marketing efforts including creating of innovative advertising campaigns, offline and online marketing strategies, promotions on social media channels, discount and loyalty awards, product or service iterations, etc. To sum it up, brand loyalty is much more than the common notion of finding an answer to the question, ‘how to advertise your business?
Brand loyalty includes the chain of actions that transform customers’ ignorance towards the brand to brand recalling, brand awareness and finally to a stage where it remains at the top of their mind.
Different Types of Brand Loyalty:
According to the American Marketing Association and few common observations on the influence of brands or businesses’ marketing efforts on customer churn and tendency to buy their products on a repeated basis, brand loyalty is of two types:
- Spurious Loyalty: It is the kind of loyalty that customers have towards the brand due to situational factors like lack of alternatives and substitutes for products or services, vendor lock-in or the old habit or convenience of buying from same brand.
- True Brand Loyalty: When customers are deeply influenced by the brand and have high relative attitude towards its philosophy, value system, pricing or product quality or brand legacy, they engage in repurchase. This behaviour is especially seen among hardcore loyal customers than with customers who exhibit split, shifting or switching loyalty.
Importance for Brand Loyalty for Businesses
There are many short-term and long-term effects that brand loyalty has to a business regardless of its size, capital, customer base and nature of the industry or products or services. Its most common importance are as follows:
Decrease Sales and Production Cost:
Cost factors are some of the greatest hurdles that can drain the monetary health of any business. Most brands and businesses in desperation to keep their cost low and increase profit margins end up curbing expenses in irrelevant areas that can bring down the quality standards of the output. Whereas other firms look at seeking expert advice from loyalty solution providers. The best way to curb unneeded operational, administrative and production expenses is by looking at ways to increase customers base and brand loyalty that leads to higher sales conversion, revenue generation and profitability.
Implement New Pricing and Marketing Strategies without Negatively Affecting the Brand’s Image:
Once the ball is in the court or in this case, the brand has accumulated a wide and loyal customer base who stick to their products due to quality, reputation, utility, etc, it becomes easier to test new marketing, product and pricing strategies without the fear of losing customers to competitors or negatively affecting their brand’s perception.
Overcome Market Competition:
Competition is the biggest obstacle for any business that strives to remain at the forefront of changes, market and industry evolution, customers’ choices and preferences. In the current age where customers have a massive number of choices and the tendency to gratify needs instantly, the struggles to outshine competitors drive marketers to the brink to come up with new and innovative strategies. Brand loyalty is one of the best ways to secure one’s position in the market. Brand loyalty shuts upmarket rivals by addressing pricing, quality, quantity, warranty, satisfaction and other expectations of customers on a very large scale.
Reduce Marketing Budgets:
Creating and implementing a marketing strategy is never a child’s play. Only a marketer understands the complexities involved in the nitty-gritty of planning, development, financing and execution of market and promotional strategy. Moreover, the risk of either ‘making or breaking a brand’ that is attached to marketing compounds the issues, driving marketers to remain extra safe with excessive spending on market research, manpower resources, creative and concept testing, etc. If a brand has great scores in brand loyalty, it gets easier to implement new marketing and promotional strategies without the worry of losing customers or failure to introduce new products or services to the shoppers or buyers.
Create Great Brand Reputation:
The markets are ruled by customers and when customers are satisfied, brands can expect better publicity and recommendations from customers that can be measured through net promoters scores or NPS, CSat levels or customer satisfaction levels and other brand metrics. A great brand with a large base of loyal customers can leverage on its clientele to act as advocates or brand ambassadors who endorse product or services features, brand values or philosophy, thereby creating a great brand reputation.
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Achieving brand loyalty is a never-ending battle for brands and to stay true to their values, it is essential to exceed customer expectations, meet satisfaction levels and deliver the quality that does justice to its pricing and marketing and also justify customers repurchase actions.
If you are a brand that is looking to keep track of your brand metrics and increase brand loyalty scores, write to us or contact our experts today.
LoyaltyXpert is recognized as one of the leading loyalty program providers in the industry.