What is Brand Loyalty? Importance And 7 Ways To Build It

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Mrudul

What is brand loyalty

When you think about your preferred grocery store, phone service provider, or airline, it’s likely you have a clear favorite. This preference isn’t just about convenience; it’s about a deeper connection. Customers often form a strong loyalty to brands that consistently deliver exceptional service, innovative designs, or outstanding products.

According to the 2019 Edelmen Report: 67% of consumers say they need to trust the brand behind a product or service. In today’s competitive market, where consumers are bombarded with endless options, fostering brand loyalty can seem like a daunting task for companies. Having a good reputation isn’t enough. However, many brands have mastered the art of captivating their clientele through continuous innovation and superior customer engagement.

What is Brand Loyalty?

Brand loyalty is when customers repeatedly choose to purchase from the same brand, favoring it over competitors even when similar options are available. It’s not merely a habit; it’s a preference that involves strong positive associations and feelings towards the brand. This enduring loyalty stems largely from how customers perceive the brand’s actions, values, and overall presence in the market.

Many of us have brands that we’re deeply loyal to—it could be the local coffee shop that knows your order by heart, your reliable internet provider, or even a brand whose products you’ve never purchased but still feel a connection with. This bond largely stems from trust, which is the cornerstone of brand loyalty.

Brand loyalty plays a pivotal role in maintaining customer retention and boosting repurchase rates. When a brand successfully aligns its values with those of its customers, it doesn’t just sell products—it builds lasting relationships. These relationships are critical in a marketplace where choices are abundant and customer preferences can shift rapidly.

In essence, brand loyalty isn’t just about the transactions that occur. It’s about the emotional connection and trust that a brand builds and maintains with its customers, which in turn drives long-term business success. That’s why it’s crucial for brands to build brand loyalty.

To better understand this concept, it’s crucial to distinguish between customer loyalty and brand loyalty.

Difference Between Brand Loyalty and Customer Loyalty?

While often used interchangeably, brand loyalty and customer loyalty are distinct concepts in the marketing world. Customer loyalty primarily focuses on the financial aspects of consumer behavior—how often customers spend and what they buy from a brand. Known as transactional loyalty, this form of loyalty is influenced by practical factors such as pricing, discounts, and rewards programs. A 2020 global survey by Statista revealed that 62% of consumers remain loyal to brands due to competitive pricing.

On the other hand, brand loyalty is more about how customers perceive and feel about a brand, making it akin to emotional loyalty. It transcends mere transactions to encompass the emotional connections customers develop with a brand. It takes time and real effort to build brand loyalty

These connections can be influenced by how customers view and value a brand’s ethos, customer service, and the overall quality of its products or services. In the same Statista survey, it was found that 57% of consumers were loyal to brands that offered exceptional customer service, while 54% cited the quality of products or services as a reason for their loyalty.

This distinction highlights that while customer loyalty can be encouraged through monetary incentives, brand loyalty requires a deeper engagement with customers, fostering trust and emotional investment in the brand’s identity and values.

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Importance of Brand Loyalty

Brand loyalty is not just beneficial; it’s essential for sustainable growth. It transforms a regular customer base into a devoted audience that actively contributes to your brand’s success through consistent purchases. This support is crucial as your brand evolves and expands, providing a stable revenue stream that isn’t purely transaction-based.

Unlike ordinary customers who may switch brands based on pricing changes, brand loyalists are driven by their emotional connection to your brand. This dedication means they are likely to remain with you, even when market conditions fluctuate. Their loyalty is not swayed by price but by their alignment with your brand’s values and identity.

Moreover, brand loyalty turns your customers into advocates. A brand-loyal customer doesn’t just buy; they become a channel of free promotion, spreading the word about your brand through personal recommendations. Word-of-mouth marketing remains one of the most effective forms of promotion, as it brings credibility and genuine testimonials to those who might be undecided about your brand.

Every endorsement from a loyal customer not only reinforces their commitment but also brings your brand closer to gaining new patrons. Therefore, investing in nurturing these relationships can help grow your customer base organically. Such loyalty is deeply rooted and tends to last longer, surviving market changes and competitive pressures. However, maintaining this loyalty requires your brand to stay true to its core identity—if your brand loses its way, so might your loyal customers.

Building and maintaining brand loyalty isn’t just a strategy; it’s an ongoing commitment to your audience that promises significant returns on investment, both financially and in brand value. Discovering how to build brand loyalty and ways to increase brand loyalty are crucial steps in fostering this vital connection.

Types of Brand Loyalty

Businesses often employ various marketing tactics to cultivate loyal customers by offering incentives such as gift cards or loyalty programs.

Below are the different levels of brand loyalty:

  1. Hard-Core Brand Loyalty

    Hard-core brand loyal customers exhibit unwavering enthusiasm for a particular brand, associating with it positively due to exceptional experiences. For example, imagine a high-end coffee brand that consistently delivers unique and satisfying flavors. Loyal customers of this coffee brand are often seen recommending their favorite brews to friends, much like Apple users do with new iPhones. If you manage to build brand loyalty like this, consider launching a rewards program to thank your brand ambassadors and encourage them to keep spreading the word.

  2. Split-Customer Brand Loyalty

    Split customers maintain loyalty to a select few brands, usually two or three, making them harder to convert into hard-core loyalists due to their awareness of alternatives. For instance, a consumer might favor sports apparel from both Nike and Adidas. While they appreciate the distinct styles and innovations each brand offers, they aren’t exclusively committed to one. To increase brand loyalty among such consumers, brands can emphasize unique benefits or exclusive offers that are not available from competitors.

  3. Shifting-Customer Brand Loyalty

    Shifting loyal customers swing between hard-core and split loyalty, often switching allegiance after a certain period. Consider book lovers who may be devoted to one particular publisher or genre for some time, only to explore new genres or authors as their interests evolve. Initially, these consumers might stick to mystery novels from a specific author, but over time, they start exploring historical fiction from another. Strategies on how to create brand loyalty in such cases include providing continuous innovation or refreshing product lines to re-engage these customers.

By understanding these different types of brand loyalty, you can tailor your approach to build brand loyalty effectively. Ways to increase brand loyalty will be discussed in detail in the following sections of this blog.

7 Ways to Build Brand Loyalty

  1. Implement Loyalty Programs

    Establishing effective loyalty programs is a key strategy for maintaining customer interest and encouraging repeat business. These programs should not only reward transactions but also foster a genuine sense of belonging and appreciation among your customers. Loyalty programs, as the name suggests, is the go-to strategy to build brand loyalty over a long time. Here are some detailed strategies to consider:

    • Reward for various actions: Beyond simply offering points for purchases, consider rewarding customers for a variety of interactions with your brand, such as writing reviews, referring new customers, or sharing products on social media. This approach encourages broader engagement and turns regular customers into active brand advocates.
    • Tiered eewards system: Implement a tiered system where customers can earn different levels of rewards based on their engagement or purchase history. This can motivate customers to aspire to higher tiers, increasing their loyalty and investment in your brand. Each tier could offer progressively richer rewards, including exclusive access to products, special discounts, or personalized services.
    • Personalized offers: Use customer data to tailor offers and rewards to individual preferences and behaviors. This personalization makes customers feel uniquely valued and can significantly enhance the effectiveness of your loyalty program.
    • Seamless integration: Ensure that your loyalty program integrates seamlessly with all customer touchpoints, including online, in-store, and mobile app interactions. A unified customer experience helps reinforce your brand identity and simplifies the process for customers to engage with the program. For businesses looking to implement or upgrade their loyalty programs, 99minds is an excellent platform to consider. Loyalty program software that can integrate smoothly with both eCommerce platforms and point-of-sale (POS) systems.
  2. Develp a strong Brand Strategy

    The way you present your brand greatly impacts how consumers feel connected to it. To foster a deep brand loyalty, it’s essential to craft a brand story that resonates with authenticity and relatability. This narrative should be evident in all your brand materials, from your visual identity to your marketing messages. Reflect on these questions as you hone your brand strategy:

    • What is the unique personality of your brand?
    • How do you want consumers to feel when they encounter your brand?
    • What compelling story can your brand tell?
    • What emotions are evoked by your brand’s visuals and language?

    Aligning your brand with the perceptions and expectations of your target audience is critical. Consider conducting surveys or community forums to better align your brand with the needs and desires of your consumers, a crucial step to build brand loyalty.

  3. Prioritize Quality

    The consistent delivery of superior quality products or services is fundamental to any successful brand strategy. Quality is not just a feature of the product or service but a core attribute that reflects the brand’s reputation and reliability. The 2021 Consumer Expectations Report by Zendesk highlights that 73% of customers will switch to a competitor after just one bad experience if it involves a product’s quality failure.

  4. For businesses ranging from gourmet coffee shops to high-tech gadget companies, maintaining high standards is essential. This commitment to quality helps turn casual buyers into loyal customers by building trust and satisfaction and helps build brand loyalty

    You can set high-quality standards by these methods

    • Rigorous quality control: Implement stringent quality control measures at every stage of production. Regularly review and adjust your processes to address any quality issues swiftly.
    • Supplier quality management: Ensure that your suppliers adhere to high-quality standards. Conduct regular audits and maintain a close relationship with them to keep the supply chain transparent and compliant.
    • Continuous improvement: Adopt a culture of continuous improvement based on customer feedback and technological advancements. Use customer reviews and feedback to pinpoint areas for enhancement in product quality or service delivery.
    • Employee training: Invest in comprehensive training programs for employees to uphold quality standards. Well-trained employees are more likely to perform their tasks effectively, leading to higher product quality and better customer service.
  5. Foster Community Engagement

    Building brand loyalty extends beyond transactions; it involves creating a sense of community among your customers. Active community engagement not only enhances the customer experience but also strengthens emotional connections to the brand, making your customers more likely to advocate on your behalf. Here’s how brands can foster this engagement effectively:

    • Virtual platforms: Develop online forums or social media groups where customers can share experiences, offer feedback, and interact directly with your brand and each other. This continuous interaction helps build a loyal community by giving customers a voice and a sense of belonging.>
    • Physical events: Host exclusive events for community members, such as product launches, workshops, or meet-and-greets, which can transform online relationships into real-world connections. These events provide valuable networking opportunities and deepen the customer's commitment to the brand.
    • Interactive campaigns: Launch interactive social media campaigns that encourage user participation. These can include contests, live Q&A sessions, and hashtag campaigns that prompt users to post content related to your brand. Engaging users in this way can increase visibility and strengthen the emotional ties to your brand.
    Examples of successful community engagement:
    • Sephora’s beauty insider community: Sephora offers a vibrant online community where beauty enthusiasts can discuss products, share makeup tips, and access beauty tutorials. This platform not only fosters a sense of community but also drives loyalty by making members feel valued and understood.
    • Nike’s run club app: Nike has effectively built a community around fitness through its Run Club app. The app offers training plans, coaching, and encourages sharing milestones. It not only supports runners in their fitness journey but also integrates Nike's products into a supportive community context.
  6. Create a Referral Program

    Referral programs are a powerful tool for leveraging the networks of your satisfied customers to acquire new customers, while simultaneously reinforcing the loyalty of existing ones. These programs incentivize current customers to promote your brand by offering them rewards for bringing in new clients who make purchases.

    According to a study by Nielsen, referral programs are incredibly powerful, with 92% of consumers trusting referrals from people they know. This statistic highlights the effectiveness of referral marketing, as personal recommendations carry more weight than traditional advertising Here’s how to effectively implement a referral program:

    • Offer appealing incentives: Rewards should be compelling enough to motivate your customers to participate. These could be discounts, free products, service upgrades, or exclusive access to new offerings. The key is to align the incentives with your customers' preferences and your business objectives.
    • Make it easy: Ensure that the referral process is straightforward and hassle-free. Provide customers with a simple way to share referrals, such as a unique referral link or code that they can easily send to friends and family.
    • Promote your program: Actively promote your referral program through your website, social media channels, email marketing, and in-store displays. Clear communication about the benefits and how the program works is crucial to its success.
    • Track and optimize: Monitor the performance of your referral program and make adjustments based on customer feedback and participation rates. This will help you refine the program to better meet the needs of your customers and your business.

    Example of a successful referral program:

    Dropbox’s referral program: Dropbox significantly increased its user base by offering extra storage space to both the referrer and the referee. This simple yet effective incentive encouraged existing users to invite more people to sign up, helping Dropbox grow rapidly during its early stages.

    By using 99minds for your referral program software, you can ensure that your efforts are not only more efficient but also more effective in attracting new customers and retaining existing ones. This strategic approach to referral marketing is an excellent way to build and sustain brand loyalty.

    dropbox referral program
  7. Utilize Brand Ambassadors

    Brand ambassadors play a crucial role in enhancing brand loyalty by personifying your brand’s values and connecting directly with consumers. These individuals, either influencers in relevant communities or satisfied customers, can wield significant influence over their followers’ purchasing decisions by authentically promoting your products or services. Here’s how brand ambassadors can help you build brand loyalty:

    • Humanize your brand: Brand ambassadors add a human element to your brand, making it more relatable and trustworthy. By sharing their genuine experiences and personal stories related to your brand, ambassadors can create a more personal connection with potential customers
    • Extend reach: Utilizing brand ambassadors allows your brand to tap into their followers and networks, extending your reach far beyond traditional marketing channels. This is particularly effective in reaching demographic segments that are skeptical of conventional advertising.
    • Enhance credibility: When a respected individual within a community endorses your brand, it enhances your brand’s overall credibility. This can be particularly impactful for new or lesser-known brands trying to establish themselves in competitive markets.

    Example of successful brand ambassador use:

    Lululemon’s ambassador program: Lululemon, the athletic apparel company, utilizes local athletes and fitness professionals as brand ambassadors. These ambassadors hold classes and events that not only promote Lululemon products but also embody the company’s lifestyle and values. This strategy has helped Lululemon maintain a strong community connection, enhancing brand loyalty among its customer base.

    lululemon’s ambassador progran
  8. Exceptional Customer Service to Build Brand Loyalty

    Exceptional customer service is critical in building and sustaining brand loyalty. When businesses prioritize high-quality service, they not only meet customer expectations but often exceed them, creating a memorable experience that encourages repeat business and fosters a loyal customer base. Here’s how exceptional customer service can enhance brand loyalty:

    • Immediate response: Customers appreciate quick and efficient responses to their inquiries and issues. Implementing systems that ensure fast response times, such as chatbots for initial contact and well-trained customer service teams for more complex queries, can significantly enhance customer satisfaction and loyalty.
    • Personalized interactions: Tailoring your service to meet individual customer needs shows that your brand values their business on a personal level. Use customer data to personalize interactions, such as addressing customers by name and remembering their preferences, which can make a big difference in how they perceive your brand.
    • Consistent quality across channels: Ensure that the quality of service is consistent across all customer touchpoints, whether it’s through your call center, live chat, email, or in-person interactions. Consistency builds trust, and trust is a cornerstone of brand loyalty.

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    Build Brand Loyalty with 99minds

    In today’s competitive market, establishing strong brand loyalty is essential for business growth and customer retention. 99minds offers an omnichannel solution that helps businesses seamlessly integrate gift cards, loyalty programs, referral programs, and store credit systems to enhance their customer engagement strategies. Here’s how 99minds can help you build brand loyalty effectively:

    1. Comprehensive loyalty programs

      99minds enables businesses to design and implement custom loyalty programs that reward customers for their continued patronage. Businesses have seen an increase in repeat purchases and loyal customers by using 99minds’ loyalty program.These programs are tailored to fit the specific needs of your business and your customers, ensuring that every interaction enhances their loyalty to your brand. Whether it’s through earning points for purchases, achieving different loyalty tiers, or redeeming rewards, 99minds makes it easy to keep your customers engaged and committed.

    2. 99minds loyalty program
    3. Referral Programs to Expand Your Reach

      Utilize 99minds to create referral programs that motivate your current customers to bring in new customers. By providing attractive incentives for both referrers and referees, you can rapidly expand your customer base while reinforcing the loyalty of existing customers. 99minds helps streamline this process, making it easy for customers to share referral links and for you to track and manage referrals effectively.

    4. Gift Cards and Store Credit

      Offering gift cards and store credit can significantly enhance customer satisfaction and retention. 99minds provides businesses with the tools to issue, manage, and track gift cards and store credits that customers can seamlessly use across various purchasing channels. This flexibility not only improves the shopping experience but also strengthens brand loyalty by providing convenient and flexible buying options.

    5. 99minds gift card
    6. Omnichannel Integration

      99minds support omnichannel capabilities, ensuring that your loyalty programs, referral programs, and gift card systems work seamlessly across all sales channels, whether online, in-app, or in-store. This integration ensures a consistent and unified customer experience, which is crucial for building trust and brand loyalty.

    7. Analytics and Insights

      With 99minds, you gain access to valuable analytics and insights about your loyalty programs and customer behaviors. These insights allow you to optimize your strategies and ensure that your efforts to build brand loyalty are as effective as possible.

    How to Measure and Track Brand Loyalty

    Understanding how to measure and track brand loyalty is crucial for any business aiming to assess the impact of their customer engagement and retention strategies. Measuring brand loyalty not only provides insights into customer preferences and behaviors but also helps refine strategies to enhance customer loyalty further. Here are key metrics and methods to effectively track brand loyalty:

    1. Repeat Purchase Rate (RPR)

      This metric indicates the percentage of customers who return to make additional purchases. A high RPR is a strong indicator of brand loyalty, as it reflects a continuing customer preference for your brand over competitors. Tracking changes in this rate can help you gauge the effectiveness of your efforts to build brand loyalty.

    2. Customer Lifetime Value (CLV)

      CLV measures the total revenue a business can expect from a single customer account throughout their relationship with the brand. Increasing CLV is a direct result of deepening brand loyalty, as loyal customers tend to spend more over time. Enhancing your loyalty programs and customer service, as suggested in earlier sections with tools like 99minds, can significantly boost CLV.
    3. Net Promoter Score (NPS)

      NPS assesses customer satisfaction and loyalty by asking customers how likely they are to recommend your brand to others. This score helps you understand the degree of customer advocacy for your brand, a crucial aspect of brand loyalty. Higher scores are often correlated with greater brand loyalty.

    4. Engagement Metrics

      Analyze engagement across various channels, including social media interactions, email open rates, and participation in loyalty programs. Tools like 99minds provide analytics that can help track these interactions, offering insights into how engaged and loyal your customers truly are.

    5. Customer Feedback and Reviews

      Regularly collecting and analyzing customer feedback can provide direct insights into how customers perceive your brand and whether they feel loyal. Implement feedback loops that encourage customers to share their experiences and opinions, helping you identify strengths to build upon and areas for improvement.

    6. Churn Rate

      The churn rate, or the rate at which customers stop doing business with a brand, is a critical metric for measuring brand loyalty. A low churn rate indicates high customer retention, a direct result of successful brand loyalty-building efforts. Monitoring this rate can help you identify and address issues before they lead to increased customer turnover.

    Wrapping Up: Strengthening Your Brand Loyalty

    In summary, fostering brand loyalty is essential for any business aiming for longevity and success. Tools like 99minds can greatly enhance these efforts by streamlining the creation and management of loyalty and referral programs. We hope this guide inspires you to strengthen your strategies for brand loyalty, ensuring your brand remains a top choice for consumers.

    Frequently Ask Questions (FAQs)

    What does brand loyalty mean?

    Brand loyalty is when consumers consistently choose your brand over competitors, often due to satisfaction with your products or services, trust in your brand, and positive past experiences.

    How can companies cultivate brand loyalty?

    Companies can cultivate brand loyalty by consistently delivering high-quality products and services, providing outstanding customer service, engaging with customers through personalized marketing, and rewarding loyal customers through effective loyalty programs.

    Why is brand loyalty beneficial to a company?

    Brand loyalty is beneficial because it fosters repeat purchases, lowers the cost of sales by reducing the need for new customer acquisition, and enhances brand reputation through positive customer advocacy.