Brand Loyalty: The Definition & 5 Ways to Built it to last in 2021

Loyalty might be the only thing that counts. 

A bold statement, eh? But, clearly when there are so many competitors offering competitive prices what’s to stop customers from swaying? Who’s to stop them from choosing a brand with steeper discounts?

That’s why developing brand loyalty is crucial.

    The Difference Between Brand Loyalty and Customer Loyalty

    Customer loyalty is when you get a customer spending with you because of the incentives you provide to loyal customers [extrinsic motivation].

    Brand loyalty on the other hand revolves around the perception a brand can create. Customers stick around because they like and respect the brand and not because of prices & rewards [intrinsice motivation].

    You can get customer loyalty by lowering down prices and give rewards. But as soon as you lose the price advantage you also lose loyalty from these customers. That’s not how you build a sustainable business.

    Brand loyalty remains steadfast no matter what your competitor can do. Even though every brand wants customers to be loyal to them it isn’t easy.

    Here’s how to build brand loyalty

    1.Send personalized emails to customers

    Be it anyone—people like and appreciate it when they feel valued.

    Here are several ideas.

    Make your customers feel valued by sending them happy birthday emails. Or an email reminding them of a refill for the last item they bought. These emails show that you care about them.

    Also, it’s easy to trigger these emails on autopilot with email automation tools.

    If there’s a new CEO on board, send customers a personalized email announcing the change.

    Another way to personalize your relationship with customers is by sending customized handwritten notes. Personalization isn’t just about including the first name of the recipient in the email

    There are several other ways in which you can personalize emails and help manage loyalty.

    1. Relevancy

    The average inbox has turned into an increasingly crowded place. Not to mention the onslaught of spam and stray emails that find their way to people’s inboxes day in and day out.

    First name personalization is the easiest technique to win attention. But is that enough to sustain the attention you won? What’s more important than a name is going further along with personalization by targeting customers with the right content.

    Content that holds the potential to impact readers. That means sending content that’s tailored to their interests, and offers they might find to be useful.

    2. Timeliness

    Personalized emails are timely in that they arrive with content that knows which stage of the buyer’s journey a customer is in. Timely emails can also be about changing business practices.

    Customers feel valued when you are being transparent about business practices. If shipments are being delayed tell them. And as Amazon does, give customers an option to cancel.

    3. Has to be from a person

    People are more likely to trust and relate to an email that comes from a real person and not a business. To do this, use a person’s name and email id in the “from” and “sender” fields. Use a face instead of a logo.

    For example, the emails and promos I get from Serpstat are from [email protected] and not [email protected]

    SERPSTAT IMAGE

    2.Customize loyalty programs with rewards that customers appreciate

    You can add any number of bells and whistles to loyalty programs but what underpins their quality are how valuable they appear to the customer. The lynchpin of a loyalty program are its rewards.

    Think of it this way: if you apply for a new credit card or home loan, your credit history determines your interest rates..

    That’s to say your financial prudence sets you up for interest rates you get. If the credit and loan industry can do this, why can’t you?

    But growth in revenue, or increase in size or complexity of a company doesn’t always translate to a better knowledge of the pulse of the customers. That means often rewards a brand offers are in mismatch to what customers want.

    An effective loyalty marketing program requires you to understand that all customers are not created equal. To maximize loyalty you must treat each individual differently giving the best value to them. Customers who create more value should benefit from that value.

    Here’s an example.

    Sephora’s loyalty program called the Beauty Insider has over 17 million members and is easily one of the most successful loyalty programs ever created.

    Beauty insider benefit
    Image @sephora.com

    The biggest hurdle before Sephora’s customers are the high prices of its products. However the Beauty insider program members can cash out reward points for gift cards or discounts that help them purchase the product for a lot less.

    beauty insider IG
    Image @BeautyInsider Instagram

    These discounts can also be used against limited edition products. Sephora gives flexibility to their members to choose the offers and products they want and make it easy for them to offset the high price.

    Sephora’s success is in understanding what their customers are there for and the best way to make their dreams possible.

    3.Use tiered loyalty programs 

    Tiered loyalty programs are another way to boost brand loyalty. Here’s how they work:

    Suppose there are two customers A and B. Customer A who spends $2000 a year can get $40 in gift cards. This is a reward rate of 2%. A customer spending $5000 should get $200 or a reward rate 4%.

    The obvious benefit? Such programs encourage people to progressively spend more.

    Tiered loyalty programs that motivate higher spending consequently result in higher profits.

    Customers earn points with purchases and they can exchange it for gift cards or gifts.

    Whatever you do, ideally you need the loyalty program to be a way for customers to keep coming back to you. 

    At the same time reward points shouldn’t take way too long to accrue to something valuable. This voids the entire odds of people staying loyal. To offset this clearly explain how many points are needed to get to each tier.

    Here’s an example.

    The rewards table is from Marriott. First off, it’s a great example of data visualization. Marriot’s reward points are valued at $10.85 for $100 in spending.

    The reward tiers are laid out in full detail on the site for anyone to see (both members and nonmembers) and the desirable rewards in higher tiers push people to spend more and become eligible for the higher tiers.

    There are other benefits like last checkout, accelerated points and upgrades as well.

    4.Create customer experiences worth remembering

    Customer reviews are what can make or break a business. Good reviews drive people to a business and bad reviews drive them away. But good reviews don’t tend to drop from the sky.

    If you want good reviews you need satisfied customers. That’s only possible with great service.

    Pay attention to customer needs and work through snags. Social media channels and other customer interacting zones are all great  places for you to sort out issues.

    Most companies imagine customer service as an extra weight they have to carry. Too many costs. They take the easiest way out. How? By cutting spending and moving support overseas. In the short run this saves some money. In the long run? Unhappy customers and PR gone wrong.

    Customer service could easily be the most important cog in your company, something that people swear you by for.

    Here are few examples:

    Trader Joe’s

    Trader Joe’s prioritizes customer service above everything else. There are several good customer service stories around them.

    Here’s one. An 89 year old man was snowed in at his home in Pennsylvania. He was unable to leave his home for anything. His daughter called a bunch of stores to see if anyone did home deliveries.

    Trader Joe’s  broke their policy of no home deliveries and delivered the items that catered to his low sodium diet for free. The entire process took less than 30 minutes.

    With this Trader Joe’s lived up to their tagline that says—”Your Neighborhood Store.”

    Trader Joes

    Ritz Carlton

    Once a family staying at Ritz Carlton brought in special eggs and milk for their son with special dietary needs. But as soon as they arrived they found all eggs to be broken. The milk too had gone bad.

    The manager and staff scoured the town to source the correct items. However they couldn’t find them.

    The executive chef remembered a store in Singapore that sold these particular milk and eggs. And he had a relative buy and fly these to Bali where the family were staying. The story found its way to Bloomberg and was shared by hundreds of thousands.

    In each of these cases, you can see that employees had a prerogative for acting according to the customer’s best interests.

    This is only possible because of the control and trust levied on them. Such experiences generate a strong impression. Customers will remember it for life. These are great content marketing examples.

    Here’s how to do this for your brand.

    Change customer service policies

    After I had placed the order for a book on Amazon I woke up the next day to find that the book was being sold for a 10% discount now.

    I hit up customer service to notify them of the difference. Next, I asked them to give me a refund on the difference. They promptly did the needful.

    If Amazon didn’t match the rate then customer service agents can do nothing but apologize. The result? A pissed off customer.

    Bad support policies can leave a bitter taste in the mouth even for companies with great support systems in place. You can avoid these problems by giving customer support agents a voice when drafting customer service policies.

    These agents are in front of customers every single day listening to their complaints and problems. They best know what customers expect from customer service. People higher up have a bigger disconnect with the ground reality.

    Hire problem solvers 

    In many of these examples, we saw customer service agents thinking on their feet. You need problem solvers in your company, not just yes-men. The best team members have high emotional intelligence.

    This allows them to find the best approach to solve the problem.

    Customers remember when they are treated well. They remember it more when they are not treated well.

    51% customers end relationships with businesses because of poor customer service. When encountering a bad experience customers are more likely to share the bad experience they had with others.

    Whether you want more patrons or lost business is entirely up to you. Customer service when done properly can generate massive positive word-of-mouth and rise in revenue.

    5.Provide extra perks for your most loyal customers

    You can couple this by providing additional benefits to the most loyal customers. You can build this feature into your loyalty program and also market it.

    What does the extra perk mean? The extra perk can be simple as some customers being allowed to skip the line or some goodies. This might seem too complicated to code on your own to your site. But loyalty marketing software can make this happen.

    This helps them stick around and also incentivize other customers to stick around and reach the same level.

    When launching a new product, invite the best customers you have for a preview evening. This lets them see the product, try it and have a chance to purchase it before anyone else does. This is more common than you think but in less subtle ways. For instance, Amazon Prime members get exclusive deals and access to offers before anyone else who’s an Amazon customer.

    This gives these offers an exclusive feel. You can extend it with a preview evening.

    For loyal customers or those who spend more you can provide them with a special level of service.

    This means giving them free shipping, sooner delivery or offering service during out of hours. Ultimately you can offer products at a discount. A lot of people are members of loyalty programs to save money.

    Conclusion: Give customers a reason to be loyal

    Ultimately customers want to be loyal to a company and they do many things to prove that. Apple’s launch events are nothing less than evangelical meetings.

    Customers who are brand loyal carry the brand everywhere they go. They might even get into arguments with others supporting their favorite brands. Brand loyalty exists. All you need to do is give them a good reason.

    Frequently Asked Questions

    What's the difference between Customer Loyalty and Brand Loyalty?

    Customer Loyalty is mostly about incentives (extrinsic motivation) while Brand Loyalty is about perception and values (intrinsic motivation). Learn more about brand loyalty and how to build it in this guide.

    How do loyalty programs work?

    Loyalty program models revolve around allowing customers to collect points through purchase or other actions on the store. Customers accrue these points on every purchase. Because of this loyalty programs encourage customers to make high-value purchases or increase the frequency of purchases.

    What is a loyalty program?

    Loyalty programs are programs designed to dole out rewards or discounts to generate brand loyalty. The programs are designed to help both companies and its customers. Brands stand to gain in the form of higher revenues and customers get something they like.

    Author bio: George is a freelance writer and blogger who’s been creating content online for the past 9 years. He blogs at Kamayobloggers.com

    References:

    Email Etiquette: 7 Things you Must do Next Time you Send an Email: https://betterproposals.io/blog/email-etiquette-7-things-you-must-do-next-time-you-send-an-email/

    What is Data Visualization: https://venngage.com/blog/data-visualization/

    This Trader Joe’s Customer Service Story will Make your Day: https://blog.surveyjunkie.com/this-trader-joes-customer-service-story-will-make-your-day/

    How Ritz Maintains its Mystique:

    https://www.bloomberg.com/news/articles/2007-02-13/how-ritz-carlton-maintains-its-mystiquebusinessweek-business-news-stock-market-and-financial-advice

    Angry Customers Cost Companies $5.9 trillion: https://www.bloomberg.com/news/articles/2013-10-22/angry-customers-cost-companies-5-dot-9-trillion

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