Brand Loyalty: Meaning, Strategies, and Expert Advice

What’s common among customers from different segments, income groups, demographics, nationalities, ethnicities, etc.? When you ask them about their favourite fashion store, food brand, or airline, they all have a name they love. Customers tend to get emotionally attached to the brands they have a good experience with, whether design or product quality.

A recent study by the Harvard Business Review (HBR) found that organisations that grew a scorecard, topping of the two most ignored but interconnected market exploration metrics —brand loyalty and customers’ faithfulness — had revenue growth 2.5 times faster than their industry peers. 

Brand loyalty, where a customer continues to choose the same brand for repeat purchases, is highly important because it is not constrained by pricing. This property is critically essential for profitability and profit margins (i.e., profit relative to costs) and becomes an extraordinarily powerful influencer. So, let’s analyse this to understand it better.

What Does Brand Loyalty Really Mean?

Brand loyalty is related to perceptions about image and experience, unlike customer loyalty, which is influenced more by monetary factors like pricing and discounts. Customers loyal to a brand are often ready to settle for higher prices, as they assume it represents better quality and service than its competitors. While they may make fewer purchases overall, the profit margins from their transactions are usually significantly higher.

After it is in place, brand loyalty is a matter of maintaining the quality of products and services, which is reasonably easy. Furthermore, brand loyalty retention is ultimately cheaper than customer loyalty retention, which requires constant low pricing and a slew of discounts to remain competitive in the sector.

Where Should You Start When Building Brand Loyalty?

Most brand-name products face heavy competition in novel and established categories where it is difficult to tell player from player, all of whom are fighting tooth-and-nail for market share. There is no shortage of tactics utilised by marketing teams to create and maintain brand loyalty 

Here are some strategies that can take you smoothly towards your end goal of making the customer brand loyal: 

1. Quality Check

Loyalty for brands starts with quality, so make sure you always give your buyers a superior one. No matter how steep or small your marketing budget might be as an entrepreneur, customers will always end up bad-mouthing low-quality or inferior products on social media and in person. In contrast, when your business consistently delivers high-quality through its products and support services, your clients become the most ardent advocates who stick to your brand and talk about it in a positive light to others. 

2. Best Customer Support

Exceptional customer service comes with a high price tag, like hiring round-the-clock staff, managers for social media, phone operators, and other support reps—but it is a worthwhile investment that leads to brand loyalty and a strong return on investment. 

In cut-throat competition, such superior service becomes your beacon of light, a differentiator in the market. Customer service usually makes a person loyal to the company. So, provide easy channels for customers to give feedback and complaints and a team dedicated to addressing those complaints.

3. Creating Digital Presence

As eCommerce continues its steep upward trajectory, businesses across sectors have realised the importance of establishing an online community to instil brand loyalty. These digital platforms are convenient and also become a place for people to connect on a deeper level with brands. For example, your customer might like a more personalised experience and want to chat with you on WhatsApp about their order or a new product query. It’s what is comfortable for them. 

Social media, in contrast to traditional advertising, offers a range of tools that allow you to see how your audience behaves in a personal way and even recognise each user. These may include posting about your products’ benefits or features, hosting Q&A sessions, or even showing the behind-the-scenes of your business. All these things help you connect more with the customer as they watch your brand’s journey and receive frequent updates, keeping your business at the top of their minds.

4. Starting Loyalty Programmes

A rewards programme for loyal customers is one of the easiest ways to encourage brand loyalty. What many people don’t realise is that redeeming store credits, discounts, and free products could actually cost quite a bit but more than that, keeping your already existing customers happy and satisfied is usually not only a better long-term investment but also an affordable one that doesn’t make you spend more than you might for a new customer. This is especially important for premium brands, discounted brand loyalty is a strong incentive to choose a higher-priced brand over a less expensive one.

Understanding Brand vs. Customer Loyalty

You may think of customer and brand loyalty as the same thing, but they’re pretty much different. Customer loyalty relates directly to the customer’s buying behaviour. For example, brands can achieve customer loyalty through competitive pricing, discounts, and rewards programmes — this type of loyalty is transactional.

Brand loyalty refers to the feelings and all the perceptions a consumer has in mind related to a brand. It goes beyond just the price of the product; it is formed by how a customer sees, feels about, and attributes value to the brand. Customers will barely hesitate to pay a higher price for a product/service from a brand they adore. For instance, eco-conscious consumers are helplessly drawn to brands that have sustainable practices and care for the environment. As the Bain survey results show, consumers are willing to pay a whopping 12% premium for sustainable products.

Expert Advice: Muskaan Tandon, Brand Head, Shiprocket

Which Brands Have Successfully Mastered Brand Loyalty?

Let’s look at some famous brands that have mastered turning customers brand-loyal and building a remarkable association and close ties with them. These brands just knew which nerve to hit when wooing consumers: 

Starbucks  

While reading this, you might be currently sipping Starbucks’ java choco chip or Matcha. A cup with this brand name hangs in the hands of many people you cross by. It’s their top-tier brand loyalty game. Starbucks has built a strong customer base by offering good quality coffee, a nice environment, service, and technology. 

They are becoming more convenient with mobile ordering capabilities and, more recently, a rewards programme that offers free drinks and exclusive offers, further boosting customer loyalty. In addition, the company’s values, such as a focus on sustainability and community involvement, grip the consumers’ conscience and strengthen their bond with the brand.

Lego 

Every second home with a child or playful adult has Lego structures around the house. Lego, one of the top toy manufacturers in the world, accounted for almost US $10 billion in 2023. This brand has nurtured a very loyal fan base, resonating with kids and adults alike. Lego is also fondly known for its unique customer engagement strategy, including Lego Ideas, where users can submit original designs that have a chance at being made into a real product and earn a share of sales revenue.

Apple

Apple’s iPhone is one of the most popular smartphones in the world, with over 1.382 billion active users worldwide. Does a Macbook, iPhone or iPad come to your mind when you think about brand loyalty? Apple users are even trolled for their addiction to this brand, an iPhone user will most likely upgrade their iPhone the moment Apple drops a new model. The catch is high-end, premium products and an unmatched commitment to quality that Apple offers to its customers. Their phones have engaging interfaces, showing their attention to detail. 

Apple’s design philosophy is all about meeting user needs with an aesthetically pleasing, minimalistic, yet efficient design. Furthermore, its products synergise, establishing an ecosystem that discourages users from choosing competition. 

Nike

Nike shoes have combined sporting attributes with wearability on the field and on the ground, making its collections some of the most sought-after ones. And their footwear, known for its comfort and durability, is some of the most desirable in the world. 

The company started its journey long ago and does an excellent job of bringing on athletes/public figures who fit the image it wants to represent to their growing demographic market. Furthermore, Nike’s loyalty programme has over 100 million members, and its community involvement is second to none. These members spend around three times as much as regular customers on average.

Conclusion

Brand loyalty is considered a big marketing win, as businesses manage to keep customers engaged with multiple product categories. But, companies can become more profitable by improving retention rates, customer lifetime value, and overall satisfaction. Organisations blessed with healthy brand loyalty can instead redirect funds, potentially previously spent on attracting new clients, into new and improved products or increasing customer service for existing customers.