How to Build Brand Loyalty?

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Customers are the most important asset for every organization. This is a no-brainer. Therefore, companies advanced their understanding of customers and their behavior. They achieved that through experimenting and learning from it. This led to a realization that customers are a central part of their strategic and marketing focus.

We don’t need to tell how customer satisfaction is essential to long-term business success which increases positive recommendation and serves as an important tool in creating and maintaining loyalty. With that in mind, a repeated purchase is a byproduct of maintaining customers’ loyalty to the brand.

🚀Read Customer Experience Guide: How to Put your Customers First? 🚀

Companies brought up new techniques to keep attracting their existing customer base and sell products repetitively, effectively building their brand. Customers now got plenty of options to choose from, which entitled them to be selective and companies started recognizing the vast potential benefits a loyal customer base could offer. Therefore, brand loyalty piled up the huge attention of marketers.

Brand Loyalty and the Internet

Before the internet, the most common way to build brand loyalty was through the interaction of a salesperson and a customer. Today, the internet provides access to thousands of customer products and services without the salesperson as the middleman. Customers, can on their own conduct independent research and compare competitors’ offerings, make informed choices and are less committed to specific brands. As a result, firms are challenged with how to distinguish their products from others.

What is a brand?

A common definition of a brand can be a set of associations linked to a name, mark or symbol associated with a product or service. When people start associating a name with other things, it becomes a brand. A successful brand can have a big potential to impact the way people view products or services. Let’s see what the key characteristics of brands are:

• Brands serve as an essential identity for products/services which help customers to distinguish them from others
• Brands promise quality standard which creates value among customers
• They also serve as natural barriers to new competitors and give credibility to a product/service

Picture 1. Brand examples

What is brand loyalty?

Once we determined the definition of what a brand is in its core, let’s see what brand loyalty is. Brand loyalty is the loyalty or faithfulness which a customer develops towards a brand. It is in the mind of a customer after he or she find the usefulness of a product or service. Brand loyalty is an important aspect of marketing as it helps companies build a strong brand and get the customers again and again. But, brand loyalty is not simply rebuying the products, rather creating a positive brand image in the customer’s mind.

Asset value of brand loyalty

Acquiring new customers in today’s competitive environment is a difficult task. Not to mention as well as expensive. But, brand loyalty comes with numerous benefits for a business. The significance of brand loyalty for businesses:

• Selling products/service to a loyal customer can be cheaper than to acquire a new one
• Brand loyalty leads to successful brand extensions, high market share, and high ROI
• Brand loyalty creates continuous profit and reduction of various marketing costs
• Loyalty favors positive word of mouth marketing through customers

Brand loyalty factors

Certain factors which influence brand loyalty amongst customers is:

• Product Quality: High-quality products ensure high customer satisfaction.
• Brand Image: A customer-friendly brand image is a positive driver for making customers loyal towards a brand.
• Perceived Value: If the customer feels it has value, it creates brand loyalty in the customer’s mind.
• Switching Cost: If a cheaper option is available with similar product quality, customers can switch their brand.
• Availability and Service: Good products must be available when a customer requires it, supported with a high-quality service.
• Customer Psychology: Sometimes brand loyalty is totally depended on customer psychology, where good products can have no loyalists and poor products can have a following.

How to recognize a loyal customer?

The question now arises – which customers you can identify as a brand loyal customer? What are the key factors or characteristics which determine the loyalty behavior towards a brand?

The common understanding of being loyal to a brand is generally seen from a repeated purchase of a product or a service. But, this factor is not enough to determine loyalty behavior. Customers may purchase a product/service repeatedly, without a favorable attitude, but it can’t be termed true loyalty as it arises from situational conditions. Those conditions can be for example psychological, emotional and out of stock situation. Therefore, true evidence of loyalty would include a history of repeat purchases coupled with some kind of situational conditions like interaction over social media which leads to some kind of commitment towards a brand.

Related: AARRR – Pirate Metrics

Picture 2. Loyal customers make your business more successful

Customer Involvement is Crucial

A critical factor of building brand loyalty is developing a connection or relationship between the customer and the brand. When an emotional relationship is created between the customer and the brand this leads to a strong bond and a competitive advantage for that particular brand.

The degree of involvement of the customer plays an important role in determining loyalty attributes. Customers development of positive attitude towards brand may be caused by a brands presence in the advertisements and customer’s past usage evaluation of the brand. However, it’s a long-term goal for marketers which require focused strategy, efforts, time and budget. A marketers role is to find a place within the customer’s thoughts and only then would a customer become loyal.