Brand loyalty vs customer loyalty. Here’s why your business needs both.

While brand loyalty and customer loyalty are related, there is a difference.

If your business has come through the pandemic storm of 2020 more or less intact, you may be counting on your loyal customers to return in their numbers and restore your balance sheet to good health. And indeed, you may already be seeing people who are hooked on the discounts, perks and rewards of your loyalty program.

But for many people, financial realities currently overshadow emotional connections and brand loyalties. So no matter how much they love your brand and everything it stands for, you can bet they’ll be off chasing discounts until life and finances stabilise. They may or may not return.

What you’re seeing here is a classic example of two different, but equally desirable forms of loyalty: customer loyalty, that revolves around customer spending and brand loyalty, which is all about customer perception.

You need to have both.

What is customer loyalty?

According to Market Business News, “customer loyalty is the likelihood that existing and previous customers continue purchasing from a specific company.”

Customer loyalty comes from excellent customer satisfaction. It relates to the overall spending power of consumers. A customer will be loyal to you because of what you offer in terms of regular prices and money-saving offers. It’s about having lower prices than competitors or better discounts for specific products they’re looking for and if you don’t, they’ll shop around. “We’re in the age of the customer”, according to The Wise Marketer. “Consumers are empowered, connected and armed with more choices than ever before.” This is why retailers need to focus on their customers and solve their problems, not their own.

What is brand loyalty?

Brand loyalty happens when a customer identifies with your brand on a personal and emotional level. The attraction has very little to do with the price of your product and everything to do with how consumers perceive your brand.

Consumers who are loyal to a brand remain customers because they believe it offers a better service and higher quality than anyone else, regardless of pricing or other financial benefits. A brand-loyal customer is also likely to try out different products and services from the same brand.

Apple users are a prime example of brand loyalty. Despite the increasingly high cost, Apple users will continually purchase every new release. The same goes for Harley-Davidson, Nike, Starbucks and other big brands that have an extremely loyal customer base.

Maintaining customer loyalty and brand loyalty.

Here are a few ways to adjust your marketing strategy to boost both customer loyalty and brand loyalty.

Brand loyalty:
To build brand loyalty, you need to find a way to connect with your customers and build a like-minded brand community.

• Inspire friendships, not ‘brand relationships’. Today’s consumer wants responsiveness, contextual awareness, personalisation and empathy when interacting with a brand. They expect a two-way dialogue that builds and deepens over time, as a friendship would. It’s all about creating an emotional connection.
• Be Transparent. Be fully transparent about all aspects of your brand. From how your products are manufactured to the data that you’re collecting about your customers.
• Be consistent. Create a brand image that truly reflects your offering and apply it consistently. This helps build awareness and trust.
• Create high-quality content. Beyond products and services, add value by offering your customers content that informs, engages, and educates.
• Have a moving mission statement. Don’t tell people what your company does, tell them what you believe in. Your philosophy is what will touch a nerve with your target market. For example, Apple’s mission statement doesn’t talk about what it does; it talks about “… bringing the best personal computing experience to…consumers around the world.”

Customer loyalty:
Loyalty from customers can be encouraged and improved by maintaining overall low prices and offering regular loyalty discounts, special offers or multi-buy deals.

• Build a rewards program. Loyalty program members spend between 12%-18% more per year than non-loyalty program members. The value of any loyalty program lies in its ability to influence profitable customer behaviour. To achieve this, you’ve got to apply some basic human psychology to your rewards strategy.
• Maintain a predictably memorable experience. According to a study from Deloitte, almost 70% of surveyed consumers say “reliable, great customer service” is what makes a brand their favourite to shop online. And they expect the same experience across every interaction with your brand; everything from your in-store dressing rooms to email communications and product packaging.
• Create a community for your customers. People trust their peers more than adverts. Build a space where your customers can share information, exchange experiences and make product recommendations.
• Make your customers feel special. Whether it’s greeting them by name at checkout, or sending a birthday email, personalise interactions at every customer touchpoint. It’s a simple, authentic way to make an emotional connection.

Why you need both.

Both customer and brand loyalty can help boost your ROI and increase your bottom line.

Once established, brand loyalty requires little effort to maintain. As long as you keep up the high quality of your product or service, and consistently demonstrate your brand philosophy, your customers won’t be motivated to join a competitors’ brand community.

Customer loyalty, on the other hand, takes a bit more work to maintain. You have to put more effort into establishing relationships through promotions and rewards programs, among other activities that offer clear benefits. The point is, you need to nurture both. And if you need some guidance on balancing both sides of the loyalty equation, we’ve got the deep expertise to help. Get in touch and let’s talk loyalty.