Today more than ever, companies are seeking to build brand loyalty to secure repeat business while building a network of satisfied consumers that will help promote the brand. Brand loyalty can help your business retain their customers amid challenges, competition in the marketplace, and even increasing costs. Because once you’ve developed loyalty, it takes a lot to lose those customers. While you may have a vague idea what brand loyalty means and how to foster it, it's worth digging deep into the definition of what loyalty means to the bottom line impact of the brands growth, revenue and sustainability, and why that matters so much
Brand Loyalty Definition
Brand loyalty describes the positive feelings consumers attach to a brand. These feelings may persist in spite of price increases, changes in your product, and increasing marketplace competition. Loyalty, at first, develops from offering a high-quality product that meets the consumer’s needs, but it goes deeper than that. When your brand becomes part of a consumer’s identity, their every day financial decisions, you've then developed a loyalty mindset that's hard to shake.
For instance, Starbucks, Sephora, and Apple are all excellent examples of companies that have reaped the benefits of brand loyalty. So has the newer Tesla electric vehicle manufacturer, with fans pre-ordering products like the cyber-truck, which may not even reach the market for several years.
Customer Loyalty Definition
Customer loyalty describes customers who will turn to your brand time and again for various reasons. Unlike brand loyalty, customer loyalty is not necessarily rooted in how well your brand matches the consumer’s identity. Customers can be loyal for many reasons, including your price, the quality of your product, the convenience your product offers, or your loyalty program your business offers.
Customer loyalty differs from brand loyalty because it is dependent on variables. Brand loyalty stems from deeply rooted emotions that create brand evangelists and, often, customers for life. However, creating loyal customers is the first step to developing brand loyalty.
The Connection between Brand Loyalty and Customer Loyalty
Although brand loyalty and customer loyalty differ, customer loyalty turns into brand loyalty when your company reaches beyond the superficial level of freebies, loyalty programs, giveaways, or pricing to forge a deeper connection with your customers. Brand loyalty is about building relationships. In the case of small businesses, it means they are buying from you, the person, and not just from your brand name.
You may have heard the expression, “People don’t buy from businesses. People buy from people.” Once your personality and name become inextricably linked with your business and your brand — and once you’ve developed that personal connection with your customers — you’ve built brand loyalty.
There are several ways to forge that connection. Often, just giving consumers what they want and catching a trend at the right time can help. But by creating relationships at multiple touchpoints, you can build customers for life — a group of people who wouldn’t consider shopping or dining elsewhere, or buying a different brand.
Why Brand Loyalty Is Crucial for Businesses?
Brand loyalty is crucial for businesses because loyal customers aren’t subject to the whims of the marketplace. Buying your products is a part of who they are. Some companies have had incredible success creating brand loyalty across generations. Coca-Cola and McDonald’s come to mind as two examples.
Customers who are brand loyal will spread the word about your business, becoming your word-of-mouth marketing ambassadors. This is important because 93% of consumers recognize friends and family as the most trusted information source when it comes to gathering brand information. And people love talking about their favorite brands. One HubSpot survey found that consumers discuss specific brands casually as much as 90 times each week.
Additionally, brand loyalty is a crucial aspect to customer retention. Statistics show that it costs five times more to get new customers than it does to retain your current customers. New customers are also 50% more likely to try a new product or service from your brand. They also spend roughly 31% more than new customers do — because they already trust your company and your products.
The Role of Customer Loyalty Programs in Brand Loyalty Today
Customer loyalty programs are a key loyalty management technique because they make it easy for customers to choose your company. They may start out by coming for the rewards or freebies, but if you have a good product that resonates with your target market, your brand will become part of their identity.
However, if your customer loyalty program is difficult to follow, glitchy, or just not very rewarding to customers, they will get frustrated. It won’t give them an incentive to shop with you and build that brand loyalty you need for not just repeat business, but also brand evangelism. (You can learn more about the mistakes that impact brand loyalty by checking out our article Are these 8 Mistakes Impacting Your Customer Loyalty?)
Loyalty Program Best Practices
Loyalty programs should build brand loyalty by giving your customers a good feeling when they interact with your business. They know they will be receiving something of value in exchange for their purchases, but they don’t have to put much time or effort into collecting or cashing in their rewards.
Ideally, they can easily share your customer loyalty program with friends, talk about their rewards on social media, and easily access and track their progress. Most of all, your rewards are never more than a click away, whether they are on customers’ mobile devices or are accessed by shopping through their home computers.
Types of Customer Loyalty Programs
Businesses of every size can structure their loyalty programs in many ways.
Small businesses may provide cardboard punch cards for each purchase, which reward customers after a certain number of purchases. However, with this type of program you are missing the opportunity to collect customer data about purchases in order to retarget those customers with sales or even improve your offerings or services based on customer sales.
You may offer a points program, tracked digitally, where each purchase accrues points that can be cashed in for rewards. You can reward customers with discounts, free products, gift cards or other benefits. You might offer cash back rewards through a card or key fob, too.
E-commerce businesses may offer unique customer sign-ins, enabling customers to accrue rewards for their purchases. But if a customer forgets their login credentials or doesn’t want that extra step in the process, it may result in cart abandonment. The process becomes especially cumbersome when every online retailer has a unique system for logging in, such as different password standards or a different username.
To simplify rewards, brick-and-mortar and e-commerce retailers alike can use an app like Twism to track purchases or store visits and deliver rewards to your customers digitally. Ideally, your customer loyalty program will be one that accomplishes the following:
- Is so easy and intuitive, your customers will use it every time they shop
- Delivers rewards of value that make your customers feel appreciated
- Won’t be lost or forgotten at home (such as traditional loyalty cards or punch cards)
- Helps you create a conversation with your customers
Track Data to Build Brand Loyalty
Whatever program you use, you’ll want to make sure you’re able to collect customer data in order to refine your program. Tracking data also enables you to tailor and customize deals and rewards based on past purchase behavior. You don’t want to make the mistake of delivering freebies, perks, or discounts to your customers without an opportunity to have further interaction.
By collecting important customer insights, you can create conversations on social media, deliver relevant ads and promotions via email or texts, and refine your offerings to meet consumer needs and demands.
Twism’s Loyalty Movement
At Twism, we exist to connect. The irony of most of today’s customer loyalty programs is that they aren’t about loyalty at all. They have more to do with an economic transaction than a true relationship with a brand. As we’ve discussed throughout the course of this article, true loyalty is emotional, and at times even irrational, and leads to customers feeling like they’re part of something — a community — a deeper connection. That’s why we’re redefining loyalty by partnering directly with credit card companies to enable brick-and-mortar and ecommerce businesses of any size to automatically connect to transactions signals, which totally eliminates the need for complex software or hardware integrations. This data then seamlessly populates the Twism digital wallet app, allowing consumers to collect all of their rewards in one user-friendly place.
Our mission is to change the way connections are formed within the commerce ecosystem. Personalization, recognition, loyalty, supporting local businesses, sharing experience with friends… we know what truly drives a consumer, because we are all consumers. We exist to share a platform that helps business owners and customers alike realize that we are not a single consumer, but part of a deeper interconnected world where our voices, patronage, and contribution is rewarded, acknowledged and seen, and heard.
Times are changing, currency is evolving, and relationships today mean more than ever. Are you ready to embrace the new era of loyalty? Get started with Twism for free today.