What Is Brand Loyalty? Examples and Best Practice
Brand loyalty is good for business. It improves customer retention, strengthens marketing efforts, increases recurring revenue and can provide an organization with greater resilience in the face of increased competition.
And while brand loyalty may seem like an impossible dream, there are a number of concrete steps organizations can take to bring them closer to their customers and help forge long-term, stronger relationships.
Brand Loyalty vs. Customer Loyalty
Brand loyalty and customer loyalty are not the same. Customer loyalty is about customers preferring and, whenever possible, systematically choosing one organization’s products and services over those of its competitors. Brand loyalty, however, is the result of creating and maintaining a long-term emotional connection where customers not only discount all choices, even if those options are less expensive or more accessible, but also actively advocate for one brand above all others.
Though brand loyalty and customer loyalty are different, one is not possible without the other. Brand loyalty cannot be fostered without first achieving customer loyalty. True brand loyalty may seem elusive. Beyond the likes of Apple, Patagonia, Porsche or Coca-Cola it can be hard to see realistic real-world brand loyalty examples. Nevertheless, there is a clear route for any organization to follow that has hopes of increasing long-term market share, improving customer lifetime value, improving retention and gaining valuable, authentic word-of-mouth marketing and validation. And it’s a journey that starts with customer experience (CX).
What is Brand Loyalty?
Brand loyalty is a strength of customer commitment shown towards an organization, its products and its services that doesn’t weaken. Regardless of whether competition within the marketplace increases or intensifies, or if the brand’s offerings become more expensive or more difficult to access, because of their brand loyalty, that customer will continue to prioritize purchasing from and advocating for that brand.
There are thousands of organizations both large and small and across every consumer-facing industry who can claim to have high levels of customer loyalty. And in each case, the organization in question will have prioritized the customer experience (CX) in order to increase levels of customer satisfaction and maximize customer retention.
However, in every sector, there are only a handful of organizations that can boast true brand loyalty and with it have achieved a form of transcendence.
The Brand Loyalty Pyramid
Organizational theorist, marketing expert and brand strategist, David A. Aaker, envisions the path to brand loyalty as a pyramid built of five layers. The base layer ‘switchers’ represents an organization’s simplest form of customer relationship – people who were simply in need of a product or service and happened upon that brand. They have no further connection with the organization and are just as likely to go to another brand the next time they require something as to maintain the existing relationship.
The pyramid then moves up through habitual buyers. It begins with those that will stay with a brand until doing so proves inconvenient or requires greater effort and moving on to satisfied buyers with switching costs (people who are as loyal as their finances will allow them to be). Next we arrive at the final two layers within the pyramid’s sharp taper. Organizations with strong customer loyalty have arrived at the fourth level and have a group of customers that Aaker describes as brand likers. These are people who have started to form a connection on an emotional as well as rational level with the organization. They will have higher levels of engagement with a brand and a higher customer lifetime value.
But then there is the pyramid’s peak. A group of customers who have forged an emotional relationship with a brand and as a result have a regular, perhaps daily connection with it. These people are happy to be associated with the brand and believe the brand shares or reflects their values.
Brand Attributes that Lead to an Increase in Customer Loyalty
Customers become loyal to an organization’s products or services because of the way a brand manages to deliver on their needs and on their expectations. Customer needs are the circumstances in which a product or service can make a difference to a customer’s life or help that person to complete a task or achieve an objective. In other words, customer needs are the motivation behind a customer contemplating any brand’s offerings.
Customer expectations are what customers hope to experience – the way they hope to feel – when interacting with an organization at each point on their path to purchasing that item. Expectations, and whether a brand meets them, is usually the deciding factor for consumers attempting to choose one brand over another.
When an organization understands the needs of its target customers and knows how to deliver on those customers’ expectations relative to the price of the product or service and its position within the market, they sow the seed of customer loyalty. For 42% of consumers, the perception that they are receiving value for money when engaging with a brand – the right product, at the right price with the right levels of customer experience – has a greater positive sway on loyalty than outright quality. Just 23% of consumers say their loyalty is due primarily to a brand offering a superior product or service.
Nevertheless, customer loyalties can be influenced by factors such as price, competition or convenience. If a new product is more convenient then it is automatically more attractive, likewise, if a competitor starts offering similar services at the same or a lower price point, it can be enough to turn a customer’s head. Simple customer loyalty persists as long as a brand understands and is aligned with that customer’s needs. If those needs change, then the customer is going to find it easier to change their brand of choice rather than persisting with the incumbent.
Why Brand Loyalty Is Important
Brand loyalty should be seen as a form of transcendence because it’s the moment within a customer relationship when a company’s combination of products or services, customer engagements and marketing and communications click in a way that they are elevated beyond simply meeting or exceeding customer needs and expectations.
It’s a move out of the physical and into the emotional sphere because essentially, brand loyalty is a type of love. In fact, 60% of customers who are loyal to a particular brand use the same vocabulary to describe their connection to it as they would when talking about their friends, their family and their pets.
And it’s this strongest of positive emotions that separates customer loyalty from brand loyalty.
Customers can be loyal to an organization’s products and services because nothing else on the market better meets their needs. But brand loyalty runs deeper because a customer can’t love a brand unless there is a relationship built on trust.
These brands make a connection that fosters trust and that connection can take many forms. For example, 25% of millennials are more likely to develop loyalty towards a brand that has a strong commitment to social causes and an ethical approach to doing business. In essence, that they can be trusted to do the right thing. Likewise, even though 94% of consumers say a positive customer experience is a deciding factor when choosing one brand over another, one-in-three consumers say that the customer experience has to be personalized before they can be loyal to a brand.
This need to have faith in an organization is why platform businesses, such as Airbnb and Uber, can’t function without their integrated trust layer. It’s also why Trip Advisor is still one of the world’s most-visited travel websites. Honest reviews and ratings of hotels, destinations, of hosts, of guests, of drivers and of riders create an environment where trust is nurtured.
Indeed, Amazon’s decision to start allowing customers to post reviews of products and services in 1995 was key to giving consumers the confidence to try a completely new way of shopping. This was a fundamental step in helping the e-commerce pioneer become a business behemoth. Today, 58% of consumers who become disillusioned with and therefore break off their relationship with a brand, will post their reasons for doing so either on a review site or via social media.
The Best Examples of Brand Loyalty: Nike
Nike’s ability to proactively track social media sentiment and engage directly with customers has become a key tenet of its brand. Customers want to build a relationship with brands that demonstrate they support social causes and in recent years the sports apparel brand has proven an expert at leveraging social listening to understand and align with its customers – 22% of consumers equate a strong, proactive social media presence with a positive customer experience.
Away from social channels, the organization has also built trust through creating collaborative relationships with customers – whether it’s co-designing clothes or customizing footwear and by removing any friction on the path to purchase, whether buying in store or online.
The Best Examples of Brand Loyalty: Amazon
Amazon’s brand loyalty is founded in absolute convenience and obsession with customer experience. From the beginning, Jeff Bezos was focused on his customers – not on profits. He knew that if he focused on delivering an exemplary customer experience that the profits would eventually take care of themselves.
Thanks to the brand’s use of technology to simplify every aspect of the customer journey, including the returns and refunds process that it has set a benchmark for all organizations everywhere with an online storefront, 51% of consumers now say an easy-to-use and intuitive website is a minimum requirement if a brand hopes to deliver a positive customer experience.
Amazon also harnessed the power of word of mouth and honest reviews as a means of building trust in its business as well as the products and services it offers from other merchants. The power of these reviews has been such that a host of organizations that sell through Amazon have made changes to their products and services as a direct result of these reviews. Thus, these changes have helped them move closer to customer needs and expectations.
As for personalization, Amazon’s recommendation engine constantly makes suggestions for products and services that are directly related to customer purchase histories. This proves the company knows who its customers are.
The Best Examples of Brand Loyalty: Apple
At this moment in time, as well as being the biggest, Apple is probably the most trusted publicly traded company in the world. It has been an aspirational brand since it was founded and in recent times has balanced the premium it demands for its products and services by placing a premium on the rights and protections of others, be it be through support for social causes or data protection. The fact that it puts privacy above everything else is now the central message of all of its publicity.
Away from its messaging and its corporate social responsibility, Apple constantly demonstrates its expertise at understanding and exceeding customer needs and customer expectations. An iPhone is one of the most technologically complex items currently on sale; yet, the customer journey could not be more effortless. The only considerations a customer needs to make are in relation to available storage and color.
If buying one of its computers, there are more steps to take on the path to purchase because these devices are serving the needs and meeting the expectations of a different group of customers.
And again, as with Nike, Apple now controls the end-to-end customer experience thanks to its own physical and digital stores and after-sales service and repairs operations.
Furthermore, what all three brands have in common is that their products and services are likely to be used on a daily basis. This level and frequency of interaction is a key ingredient for growing brand loyalty.
How to Increase Loyalty to Your Brand
It’s easy to point to universally recognized and respected organizations as examples of brand loyalty that anyone could replicate. But the truth is that any organization can identify their ideal customer type and craft a product or service with the right levels of support to intersect with a customer need and customer expectation at the right price point.
Therefore, brand loyalty begins with undertaking a customer needs analysis to understand who the ideal customer is and what that person’s motivation is for seeking out a product or service. But then it continues with gaining a greater understanding of and ability to manage that person, or that persona’s expectations.
As already mentioned, consumers place the perception of reviving value for money above all other criteria when it comes to considering customer loyalty. How much something retails for should reflect more than its usefulness. It should also reflect the effort or lack thereof required to own the product or use the service.
This is why the level of service is more important than product or service quality when calculating the value-for-money equation is customer experience. The levels of attention and ease customers expect when interacting with a brand will be to an extent, dictated by the product or service type and its position in the market. However, when asked to define the individual elements that add up to the sum total of customer experience, across all industries, across all price points and across all types of product and service, the most important factor is friendly and knowledgeable staff (69%). All consumers want to feel welcome and appreciated as customers and all customers view time as a valuable commodity and something that should be spared, not wasted.
Time Waits for No Brand
This fixation with time is why when asked to highlight the areas of service and engagement that they feel create an environment that fosters loyalty, 50% of U.S. consumers point to 24/7 service, 40% of all consumers highlight access to online chat and 51% want an easy-to-use web experience when engaging with a brand.
Customer experience is the key to creating customer loyalty. Just 6% of consumers claim that CX plays no role in their decision-making process when it comes to choosing one brand over another.
Turning Customer Loyalty into Brand Loyalty
How an organization converts customer loyalty into brand loyalty revolves around communication, publicity and messaging; for instance, 94% of consumers believe it’s important that a brand is an ethical employer. Therefore, if it’s possible to demonstrate dedication to the employee experience, this is the perfect moment to draw attention to it.
Yet to go further than that means leveraging social listening and social monitoring. Word of mouth and online buzz have a huge influence over the decision-making process when it comes to aligning with or ignoring a brand. Actively tracking the conversations about and around an organization and then directly engaging with those people with the loudest voices. Whether those people are advocates or detractors, it will pay dividends. As well as creating personal connections, interacting, in public, via social channels, demonstrates a willingness to listen, to learn and to improve.
The data and insights available across the major social networks as well as dedicated blogging platforms and review aggregation sites is invaluable to an organization that wants to close the gap between its brand and its potential and existing customers’ expectations.
However, the route to brand loyalty starts with understanding what customers need and hope to receive from an organization and using those insights to craft a customer experience that delivers on those initial expectations.
Brand loyalty is elusive. But unless an organization can first achieve and maintain customer loyalty, brand loyalty stops being elusive and becomes impossible. Download the best practice guide, Understanding and Measuring Customer Satisfaction.