How Brand Loyalty is the Answer to Today’s Business World

brand loyalty

We go through life searching for any kind of loyalty in any kind of relationship we are in. We strive and we crumble for our dog to be loyal. And then we do even more obscene things for the rest of our relationships. And why do we do it? Well, because we all need stability. And frankly, loyalty is a ground we can stand still without shaking our legs. The same goes for brand loyalty: it is considered to be the bread and butter of what keeps a business alive.

You must know that brand loyalty is a pattern of consumer behavior where consumers become committed to brands and make repeat purchases from the same brands over time. Just like when we become committed to a certain person and only look for love and safety in them. And just like people, consumers may cheat on their favorite brands. And that is an example of brand loyalty gone wrong.

If you didn’t get this last part quite right, here is how it works. Picture yourself at Wal-Mart. You are going to have some friends over tonight, so you are looking for some drinks. You usually buy Coca-Cola but tonight it is different. Why? Because you heard on the news about a Pepsi scandal. And it really doesn’t matter what the scandal is about. Whether it is about the CEO of the company supporting a cause you don’t agree with or an employee was treated in a way that no employee should ever be treated, it doesn’t matter anymore. You have the itch already so you turn and buy Pepsi tonight. Got it?

All about brand loyalty

One thing to consider is that your loyal customers consistently are going to purchase your products, regardless of convince or price. Brand loyalists don’t purchase a substitute brand if the brand that they prefer is not available at the moment. They might travel to a couple of stores, sometimes even go overboard and drive to a different city in search of their favorite brand. And the best part is that those customers are likely to forgo marking a purchase if their brand cannot be found than they are to purchase a substitute. In today’s world, keeping customers happy should be a top priority for a business or brand.

Emotions, emotions

Let’s move on to emotions. They are important, right? We make almost all of our decisions based on our emotions. Well, the logic has its say sometimes, too. But brand loyalty is all about emotional involvement. And that is what develops between the consumer and the brand. Something happens in the consumer’s mind. They perceive the brand as something that fulfills a physical need or an emotional want. And it all is done in such a unique way that some kind of emotion is induced during the purchase process and while using the brand. It is all about how your brand makes them feel.

Now, how can your brand make your consumers feel that something special? As you understand, it is not like putting butter on bread. However, some companies usually use different marketing strategies to nurture loyal customers. Those techniques may include loyalty programs, such as reward programs, or trails and incentives, such as samples and free gifts.

The active loyalists

A research done by the Direct Marketing Association showed that brand loyalty can play a big role in buying decisions. One would have though, that things like price and convenience matter to most consumers. But it is not true. According to their report, 40% of consumers are “active loyals,” which means that they “stay loyal to brand for routine and special purposes.”

For a second, think about your competitors. They are only a click away. Customer loyalty really is the new marketing. I mean, if you don’t fight for your customers, who else will? Your competitors are waiting in every corner like hungry wolves to take them away. And today customers have access to an endless amount of information about your business. Research shows that customers are ready to stop dating around and stick with companies who go above and beyond to create a fantastic customer experience.

The perceiving evidence we all love so much

I know that all you need is an evidence to believe in the idea of brand loyalty being awesome and all. So here we go. Now think about this statistic. Studies have shown that it costs 6 to 7 times more to acquire a new customer than keep an old one. So over performing your competition depends on having a loyal tribe of happy and satisfied customers. Now think about this one: on average, loyal customers are worth up to 10 times as much as their first purchase. And ask yourself this question “is great customer service really worth the effort”?

And this is not the end yet. A 2011 report published by American Express revealed that 3 out of 5 customers are willing to give up a former favorite brand in order to have a better service experience. Imagine that? What if your customers need better customer service and they receive it from a different brand? You will lose them right there at that moment. Also, research shows that 9 in 10 Americans are willing to spend more with companies they believe provide excellent customer service. So if you want your company to grow, you need your customers to spend more. And for that, well, you just need excellent customer service.

Last but not least, imagine a powerful brand with a loyal customer audience behind it. We all know it can withstand any environmental factor thrown at it, right? It does not matter if there is a recession at the macro-level or a corporate re-organization at the micro-level. Brand loyalists are great in a way that they will keep on buying the brand they love.

Remember the great example of Toyota recalls of 2010? The brand survived and continued to thrive despite micro-environmental factors. And you know why? Its consumers will trust the brand and remained loyal to it.

Today the world is not the same as it was a couple of years ago. Heck, it is not even the same it was yesterday. Customers want more and more every day. Their tastes and needs change. But one thing stays still: they want high-quality customer service. If you can provide that, well you will get yourself some loyal customers. But of caurce that is not all: do you know how to build an empire with good customer service? 

Armen Margarian

Armen Margarian is an attorney with The Margarian Law Firm.

No Comments Yet

Leave a Reply

Your email address will not be published.

If you are a prospective entrepreneur and you want to get featured on our magazine, contact us.