If you’re like me you carry at least one loyalty card in your wallet. I have about six of them: grocery store cards, gas station point cards and frequent flyer program cards.
The question becomes: should these brands count on me as a loyal customer and a true brand advocate?
The truth is I have no loyalty card from the brands I am truly loyal to.
Building a strong brand that generates a loyal following is every Marketer’s dream. In an ideal world our customers will act as brand advocates and take our business to the next level.
Easier said than done.
Any marketer who manages a real brand, in a real company, with real competition can confirm how much time and effort it takes to make even the smallest incremental step towards achieving brand loyalty.
That being said Marketing is under a lot of pressure to build a brand that will turn first time buyers into repeat purchasers.
Brand Loyalty: A Definition
Brand loyalty is achieved when customers purchase your company’s product and service repeatedly, are willing to step out of their comfort zone to own it and recommend it to others.
The benefits of a loyal customer base are well known.
It costs up to six times more to attract a new customer than to keep an existing one. Moreover, these customers are the best source for getting new business through referrals and recommendations.
Types of Brand Loyalty
Canadians have an obsession with loyalty programs.
According to this Marketing Magazine article “92% of Canadians are a member of at least one loyalty program and, on average, are members of 6.4 of them.”
These statistics look great for brands that have a loyalty program in place. But does the high subscription rate translate into consumers being truly loyal to that particular brand?
In reality there are different “types” of brand loyalty:
Convenience loyalty-this is the case with my grocery store loyalty cards. The only reason I subscribe to them is pure convenience . I shop there anyway, so why not take advantage of discounts, free products and exclusive member promotions? I would not consider myself loyal to these brands. I am sure a new loyalty card will show up in my wallet if a new store opens closer to home.
Incentive-driven loyalty-some brands “buy” customer loyalty through incentives and other short term promotions. Many Facebook “Fans” fall into this category, as many brands use exclusive social media deals to increase their virtual fan base . This type of loyalty is short lived, as these incentive-seekers are probably also members of your competitors’ loyalty programs for the same reason.
True loyalty-these customers truly believe in your brand and are immune to short term incentives from competition. The only way to loose these true loyalists is to provide a bad brand experience on a consistent basis. These customer segment deserves your full attention as they can be easily converted into brand advocates.
Cult loyalty-brand such as Harley Davidson, Apple, Lululemon and Mini managed to create communities of brand fanatics who are living the brand and are on a mission to attract more followers. Their loyalty goes beyond the actual purchase of the product and into adopting the brand philosophy as a way of life.
Can Brand Loyalty Be Achieved?
Achieving brand loyalty looks like mission impossible to some companies.
Why is it so difficult to keep customers happy and coming back? Below are some possible causes:
Lack of a differentiated offering. Loyalty starts with the first experience with the brand. True brand differentiation, while a valid strategy on paper, is being pursued by only a few companies. In addition, faced with increased competition and constant price pressures, Marketing is often required to deliver immediate results rather than building a long term relationship with the customer.
A multitude of choices. Most categories face fierce competition that gives consumers plenty of choices. Moreover, line and brand extensions contribute to the confusion. Even Apple, after the death of Steve Job, has fallen into the line extension trap: iPad Mini, cheaper iPhone, etc. Extensions only dilute the brand and confuse consumers, who tend to navigate from brand to brand in search of the best value. Hence, less loyalty.
Flaw in current loyalty programs. Most loyalty programs are based on “the more you buy the more you get” principle which does nothing to encourage true loyalty. The purchase size or frequency cultivate incentive-driven loyalty. If the incentive is taken away, customers transfer their loyalty to competition. True loyalty is achieved when an emotional bond is created between the brand and customer.
Brand loyalty is difficult to achieve, but not impossible. It all starts with the genuine desire to offer the best possible brand experience that is consistently delivered. In time, your customers will reward you for your efforts.