How To Build Brand Loyalty
What is a Brand?
For any business to survive a sustainable and reliable stream of customers is the primary requisite. Among the many factors that cause customers to buy repeatedly is ‘Brand Loyalty.
Let us begin by understanding what exactly we mean by a “Brand”.
Wikipedia defines Brand as the name, term, design, symbol, or any other feature that identifies one seller’s product as distinct from those of other sellers.
Brands are used in business, marketing, and advertising.
Branding is the process of creating a unique name and image for a product in the consumers’ mind, mainly by resorting to advertising campaigns which have a consistent theme.
Branding seeks to establish a significant and distinctive presence in the market that attracts and retains loyal customers.
In other words, a brand implies a sort of solemn promise to a customer. It tells them what to expect from that particular brand’s products and services, and also seeks to differentiate their offering from that of their competitors.
One’s brand is a derivative or reflection of, who he/she is or aspires to be and also perhaps who he/she is perceived to be.
The foundation of a brand is the logo. The logo helps communicate the brand.
So besides the product itself, the website, the advertising campaigns, the promotional material and the packaging- all of these should also sport the logo.
In the world of cut-throat competition, an effective brand strategy gives one a distinct edge.
A strong brand equity can be built by consistent and strategic branding. This in turn means added value brought to your company’s products or services that allows you to charge more for your brand than what identical, unbranded products command.
A well known proof of this is the Coke brand.
A Coca-Cola Campaign
Coca-Cola has built powerful brand equity. This enables it to charge far more for its product than what a generic soda costs, and we find that customers quite willingly pay that higher price.
What is Brand Loyalty?
Let’s now look at the concept of ‘Brand Loyalty.’
Brand Loyalty is defined by David A. Aaker as a measure of the attachment that a customer has to a brand.
It reflects how likely a customer will be to switch to another brand, especially when that brand makes a change in either price or product features.
Factors like price and lack of variety are often ignored by die-hard brand loyal customers. They ignore these factors for two reasons:
- They wish to repeat or continue the positive experiences they receive from purchasing a familiar and known brand.
- They wish to reduce the risk and fear of the unknown they experience when trying competing brands.
Three Cs of Brand Loyalty
There are three categories of brand loyalty acknowledged in the marketing world.
- Club level following
- Community level following
- Cult level following
The Club Level
The Club level of following is where most brands are positioned. Here the potential customers who may buy your brand may number in a few thousands or even a few hundred thousand.
This large pool of people will be a heterogeneous mix of people of varying tastes, needs and budgets.
The sort of feedback coming from such a large pool of people is therefore likely to be a quite vague.
Commitment to the brand will be low though there may be brand recognition and brand awareness.
The Community Level
The Community level of following will have a much reduced following say only ten percent of the following at the club level. However the brands which fall into this category will have a well developed market.
The brands here will have been in the market for a considerably long period. These customers are more committed to their choice brand than the club level customers.
This is because these brands have been delivering what they have promised to the customers and their customers are reasonably well satisfied with their products.
The community is characterized by people sharing similar tastes and preferences and so the feedback will have a lot more clarity and will therefore be insightful too.
The Cult Level
The Cult Level is the ultimate level in Branding and all brands aspire to reach this level. The loyalty of the customers to the brands at this level is absolute and total.
The following will be far less than at the other levels in terms of numbers but their dedication to their choice brand is unswerving.
These can be described as near-fanatical fans, who are true believers in the brand and identify with it so completely that they feel a sense of ownership in the brand’s popularity and success.
The fans themselves double as brand ambassadors promoting its products voluntarily and loyally.
Cult level of loyalty can be seen in brands like Harley-Davidson and Apple.
Some other brands enjoying a cult level following are Ferrari, Dicati, Breguet, Nautor Swan etc.
If a brand has the monopoly of the market, by offering one of a kind product or very unique services, the connection it will have with its users or customers will also be very special.
A brand can also have a unique business model or offer some special services and thus become a niche brand.
It could also be about the staff training imparted or impeccable after sales service offered by the brand which induce customer loyalty.
Moving Up in the Brand Loyalty Ladder
Moving up the brand loyalty ladder involves augmentation of brand loyalty in customers.
How can this be achieved?
When an upward movement from club to community level is being contemplated, marketing efforts will have to raise the thresholds between the brand and other competing brands , thus creating opportunities to induce loyalty in the customer.
As all your competitors are continuously trying to wean away your customers the challenge is all the greater.
Targeting these consumers by focusing on raising brand consciousness can perhaps be an effective strategy here.
In the community level of brand loyalty, these customers are more committed to their choice brand than the club level customers.
They generally do not switch loyalties as easily as the club level customers because they believe their brand reflects their personality and their standards.
So getting customers to switch loyalties is not easy if the competing brand is a strong one.
Marketing efforts here will have to focus on stressing the connection between brand, individual identity and their common shared culture.
Some Loyalty Building Strategies
Getting feedback from established customers on what they best like about your brand can give you insights on how to strengthen your brand.
Achieving a cult level following, requires the best brains in the business and will require careful strategic planning to project the brand as an exclusive and lifestyle brand.
Studies undertaken by customer loyalty researchers say that the estimated cost of acquiring a new customer can go up to five times the cost of retaining an old customer.
This staggering fact implies that nurturing brand loyal customers is a priority for any business from a costs viewpoint.
Some tried and tested customer loyalty building strategies are:
- Establishing special promotion programs, discount offers and other rewards programs
- Organizing special events open only to customers
- Instituting promotional gifts and giveaways
- Instituting dedicated sales and service personnel to handle customer care exclusively
- Priority order entry and handling via phone and also via the net
- Extending easy and attractive payment terms and financing options to deserving customers
- Using Customer Relationship Management Software which keep track of customer interactions and transactions can be a useful tool to assist in building and strengthening customer relationships
Customers who can be relied upon to continue to make repeated purchases in the future can help ensure a sustainable cash flow.
Many brand loyal customers in fact share their experiences with family and friends and often refer other potential customers making them an effective secondary sales force.
Since most people associate with those who have similar values and tastes, this sharing and referring can help an organization build a large base of the right sort of customers.
For example the Motorcycle manufacturers Harley Davidson, has an extremely loyal customer base who go to the extent of willingly paying to wear promotional products bearing their famed and well-loved logo.
Brand Loyalty in a Connected World
In today’s web connected world where practically everyone has a presence on the social media and websites, sharing one’s customer experiences (positive and negative) has become a common practice.
This can be successfully leveraged by brands to help build public relations value for an organization. Strong brands attract media attention and therefore opportunities.
Some market savvy companies make use of an innovative strategy which has been found to be quite effective.
Brand Loyalty in Difficult Times
In economically straitened times, the scenario can become even more challenging since many customers abandon their preferred brands in favour of lower-priced brands or store brands or even unbranded generic products.
To counter this brand exodus, an organization may create a lower-priced brand to cater to the budget conscious consumer.
While this strategy may help protect an organization’s market share, it can also be counter-productive, as it may eat into the market share of the higher priced brand and impair a premium brand’s image and appeal as an exclusive brand.
Summing it Up
Summing up, those near- fanatical, true believers of your brand are the ones who whip up a frenzy of passion for your brand.
So go out there and empower them for they have it in them to make your brand a cult!
This post is based on a Webinar by Chintan Vora, Co-founder Digital Latte