Brand Loyalty: What It Is, Why It Matters, & How to Build It
Jun 28, 2022|Read time: 14 min.
- Brand loyalty is the level of love, dedication, and commitment customers have to a specific brand.
- Brand loyalty leaders grow revenue 2.5x faster than industry peers.
- Customer experience, trust, and shared values help to drive brand loyalty.
Brand loyalty goes beyond customers recognizing your products on the shelf. It’s about trust, shared values, and positive experiences. Consumers who are loyal to your brand wholeheartedly subscribe to your vision and, therefore, commit to buying from you.
Achieving strong brand loyalty allows you to spend less time and money acquiring customers — leading to more revenue over time. When you build a robust fan base around your brand, your customers aren’t just customers. They are enthusiasts, advocates, and supporters.
What is brand loyalty?
Brand loyalty is defined by the level of love, dedication, and commitment customers have to a specific brand. Loyal customers are much more than just repeat customers. They are brand evangelists who believe in your company so strongly that they will buy from you regardless of price or convenience.
To understand the power of brand loyalty, think of Coca-Cola and Pepsi. They taste similar — but tell that to a Coke drinker and you’ve just made an enemy! In fact, Coca-Cola drinkers would rather drink tap water than order a Pepsi at a restaurant.
This reaction has nothing to do with price or availability but has everything to do with emotions. Those with high brand loyalty perceive the brand as superior based on personal preferences.
Brand loyalty vs. customer loyalty vs. brand affinity
Brand loyalty, customer loyalty, and brand affinity are similar concepts, but there are several key differences to note.
In short, Brand loyalty is allegiance to the company, customer loyalty is a transactional relationship based on prices and discounts, and brand affinity relates to how consumers feel about your brand.
Here’s how they differ from one another:
Brand loyalty is when a customer has had positive experiences with a product or service and therefore makes repeat purchases over time. High-quality products, exceptional customer experience, satisfying customer service, and shared values are all factors that influence brand loyalty.
Brand allegiance is not driven by price or convenience. When consumers purchase from brands they adore, they also avoid competing brands, even if those brands offer better prices.
Brand allegiance is not driven by price or convenience.
In comparison, customer loyalty is a transactional relationship based on discounts and prices. Your brand can increase customer loyalty through incentives like customer loyalty programs, rewards programs, bonuses, gamification, and nurture marketing.
Think of The North Face. The apparel retailer offers a VIPeak rewards program that enables loyal customers to “turn their passion for adventure into real rewards.” With the program, customers earn points with every purchase.
In addition, members can also rack up reward points by attending The North Face events, checking in at brick-and-mortar stores, downloading the app, etc. Sticking closely to its brand image, members can redeem points for unique travel adventures.
Brand affinity describes how customers feel about the product or service on an emotional, personal level. With brand affinity, consumers tie their identity to a certain brand. This is why certain people literally get Harley-Davidson tattoos.
With brand affinity, customers make an emotional connection to the brand and will purchase it whether they need the product or not. Price becomes a non-issue. Think of how people associate themselves with Apple. They feel that their affinity towards the iPhone or Mac is representative of who they are as a person.
Do you remember the days of standing in line overnight at the Apple Store for a new iPhone release? Apple enthusiasts would line up at midnight, waiting for the store to open its doors so they could be the first with the latest version of the phone.
That is brand affinity.
Why is brand loyalty important?
7% increase in brand loyalty yields 85% higher customer lifetime value.Brand Keys
Companies with strong brand loyalty deliver 5x more shareholder value.Harvard Business Review
77% of US consumers have remained loyal to a brand for ten years.InMoment
Brand loyalty is important because it is an opportunity to build a relationship with your customer base. In addition, it helps you improve customer retention and build the business. Brand loyalty results in more word-of-mouth leads, a greater number of referrals, higher new product adoption rates, lower acquisition costs, increased profitability, and higher lifetime value.
More specifically, companies with high loyalty scores grow revenue 2.5x faster than industry peers, according to a Harvard Business Review study. The same research found that companies that excel at brand loyalty deliver up to 5x the shareholder returns over a 10-year period. In addition, a Yotpo survey found that 59.3% of loyal shoppers refer friends and family to brands they love.
Even though we live in a fast-changing world with short attention spans, brand loyalty has staying power and delivers long-term results for brands. 77% of US consumers said they have remained loyal to a brand for ten or more years. The impact of this is massive when you consider that a 7% increase in brand loyalty can translate into an 85% higher customer lifetime value (CLV), according to Brand Keys.
Long-term brand loyalty has a significant impact on revenue and profitability. During that extended timeframe, your brand is getting repeat purchases without incremental acquisition costs.
What influences brand loyalty?
There’s much more to cultivating a devoted customer base than having a strong brand strategy.
First, you need certain foundational elements in place, such as a recognizable and relatable brand image, strong brand awareness, and an exceptional customer experience.
After those boxes are checked, take the following steps to amplify brand loyalty.
Consumer behavior trends
Keep your finger on the pulse of consumer behavior trends. Deloitte points out that the pandemic changed all the rules and brought about historic changes to consumers’ shopping behavior. For example:
- Grocery shopping went digital during the pandemic. Online grocery sales increased 40% year-over-year.
- Hotels and airlines could no longer rely on business travelers, as companies either banned travel or slashed budgets.
- Restaurants and retailers witnessed in-store traffic reduced to a mere trickle. For instance, digital orders increased by 134% at food chains like Chipotle.
If you want to increase brand loyalty, then align with consumer buying behavior to ensure you continue to meet their needs over time.
Customer experience shapes how consumers perceive your brand while interacting with you, whether through an e-commerce site or at a retail store. Any interaction — online or in-person — with your business influences customer experience.
Customer experience matters. A lot.
In their future of CX report, PwC surveyed 15,000 consumers and found that 73% feel that customer experience is an important factor in their purchase decisions.
Yet only 49% of those surveyed believe that companies provide a good customer experience today.
The report also uncovered that:
- 43% of consumers would pay higher prices for “greater convenience.”
- 42% would pay more for a “friendly, welcoming experience.”
- 65% feel a positive brand experience influences them more than advertising.
- 92% would abandon a brand after merely two or three negative interactions.
A Harris poll commissioned by Google found that 82% of shoppers want a brand’s values to align with their own. On top of this, roughly 75% of shoppers surveyed confirmed that they had completely abandoned a brand over a conflict in values.
Cross-reference these findings with the increase in purpose-driven consumers, and you’ll see the impact on brand loyalty. According to an IBM-sponsored study, purpose-driven consumers (those who base product and service decisions on personal values) are actually now the largest segment of the consumer market (44%).
Consider Rothy’s. They are relatively basic shoes for $140+ per pair, but they are made from recycled bottles, as part of the company’s zero-waste mission. Rothy’s has already converted 125 million+ single-use plastic bottles into thread for its shoes. They’ve also repurposed 400,000 pounds of ocean-bound plastic for the brand’s line of bags and accessories.
Values-influenced consumers are willing to spend extra money on Rothy’s shoes to help save the planet.
Customers are attracted to specific brands because they trust them. Brand trust is hard to build among consumers. So it’s important for brands to keep their promises, uphold their values, and show they honestly care about customer satisfaction.
In addition, individuals trust user-generated content (UGC) more than content from brands. In TINT’s “State of User-Generated Content 2021” report, 93% of marketers agree that consumers trust content created by real people more than content created by brands.
How to build brand loyalty
It’s cheaper and more effective to retain customers than to acquire new ones. But how do you actually build brand loyalty? To create loyal customers you need more than a great product or service. You must foster brand love.
Here are nine tips to build brand loyalty that lasts.
1. Clarify your brand’s purpose
What is your “why?” Whether you’re Lush Cosmetics which provides a cruelty-free, ethically sourced, 100% vegetarian option in the beauty sector, or TOMS, which believes businesses should improve lives, every brand has its purpose.
Define your brand’s purpose by asking the right questions:
- What are your teams passionate about?
- How can your brand make a difference?
- In what areas do you excel?
Tesla’s original brand purpose was:
Tesla’s mission is to accelerate the world’s transition to sustainable transport.
As you can see, they cleverly focused on saving the planet. It’s easier for consumers to feel strongly about a cause as opposed to a company that’s wholly focused on profits.
After you clarify your brand’s purpose, train your internal teams. Your employees represent your business, so it’s critical they embody the brand’s purpose.
2. Be authentic and true to your values
If your purpose feels contrived and inauthentic, you won’t form a genuine connection with your target market. That’s why it’s essential to be authentic. Authenticity is how you build trust.
Your business may be ten, twenty, or thirty years old, and over time you lost the initial purpose you started with. To fuel brand loyalty, go back to your roots and bring your purpose back to the forefront.
Show your own authenticity in a few different ways:
- Tell stories: Share user transformation profiles, founder stories, and testimonials.
- User-generated content (UGC): As mentioned above, encourage your customers to post content about their experiences with your brand.
- Add value: Don’t make everything about you. Instead, share your knowledge and expertise. Be genuinely helpful. Act as the trusted guide to meet your customers’ needs.
3. Listen to your customers
Customers want you to listen to them and take them seriously. So make voice of the customer (VoC) feedback a core part of your market research.
Use social listening tools, review customer service transcripts, consult with your frontline salespeople, and establish a customer advisory board to understand your customers more deeply. Offer community forums, review chat transcripts, conduct customer surveys, read online reviews, and more. You can even review competitors’ online reviews to spot opportunities where they are weak.
These voice of the customer marketing efforts go a long way to improve brand loyalty and ensure you’re meeting customers’ needs.
4. Establish positive brand associations
Your brand association is like your brand personality. What traits do people associate with your brand name?
Let’s look at Subaru. Subaru is associated with family, love, and safety. This positive association through the years has created many loyal customers. Because of this, they’ve earned the Kelley Blue Book “Best Brand” award seven times and the “Most Trusted Brand” every year since 2015.
Brand associations can also be celebrities or others who represent the brand publicly. Think of how Burberry partnered with Emma Watson to appeal to younger, more modern audiences, and turn around the brand.
Proactively work on establishing brand associations for your own organization. Then, monitor and measure the associations among your audience members to ensure that they are gaining traction and resonating.
5. Prioritize customer service
Customer service is a crucial factor in brand loyalty.
Zappos, for example, grew quickly thanks to its core value of being “manically obsessed with making sure our customers are happy and proud to do business with us.” The late founder, Tony Hsieh, famously said, “People may not remember exactly what you did or what you said but they always remember how you made them feel, that’s what matters the most.”
To prioritize customer service:
- Create great experiences.
- Make contacting customer support fast and easy.
- Offer multiple methods of support, including website, online chat, email, social media, and phone.
- If someone calls your support line, don’t send them into a byzantine maze.
- Respond quickly (and happily) to issues so you can resolve them swiftly.
- Follow up with your customers whether they experienced a problem or not.
- Listen to them! By asking and listening to their feedback, you’ll improve their experience.
6. Empower brand ambassadors
Brand ambassadors and strategic partnerships are vital for getting in front of new audiences and solidifying your place in the hearts of your customers. Empower your brand ambassadors to share your message by making it easy to do so.
- Provide social media copy and assets for co-workers, partners, and brand ambassadors to publish on Instagram, Pinterest, Facebook, LinkedIn, and your other preferred social media platforms. You greatly increase your reach when messaging comes from multiple sources.
- Create samples and template email copy to make it easy for partners to share your content.
- Gamify sharing your content by rewarding employees with incentives, badges, and other rewards for sharing.
To better ensure the success of your brand ambassador program, clarify KPIs upfront and then align activities accordingly. If you’re looking to increase brand loyalty and repeat purchases, for example, integrate your existing loyalty and subscription offerings with your ambassador program.
7. Build a community
Brands with a fanatical community win more brand loyalty. Harley-Davidson is an excellent example of this. By transitioning from a product focus to a community focus, Harley-Davidson has cultivated a fan base in the millions with its Harley Owners Group (H.O.G.).
One of the effective strategies that HD implemented was to establish local chapters around the world, with each one tied to local dealerships. This ensures that the local events, activities, and communications are highly relevant to every H.O.G. member.
How can you build a brand community? Start with a good reason for people to join. What do your customers gain by joining your community? Why should they engage with it? Make it easy to invite others to the community, so it grows.
To build a stronger, tighter-knit, more passionate community, define a specific buyer persona to target. If you try to be everything to everyone, you won’t stand out to anyone.
8. Make the world better
As we’ve mentioned, consumers care about your values, and a major value many of them care about is the social and environmental impact of your business.
88% of consumers said they’d switch to brands that support ethical and environmental causes.Futerra
But remember to help your audience make a difference. Some brands take on a hero role and relegate the customer to “audience/beneficiary/cheerleader” rather than a co-collaborator.
This is why 43% of those surveyed felt that brands were making it harder for them to be environmentally friendly and live ethically in their daily lives. So be inclusive!
By taking action and including your customers in the journey, you can not only attract new customers and retain existing ones, but you can also make the world a better place.
9. Utilize social media
Social media is an easy way to meet your customers where they are: online. Build more engagement with social media by telling your brand story, encouraging user-generated content, and having real conversations with your customers.
Your biggest fans are likely following you on social media. A Marketing Dive study found that 90% of people buy from brands they follow on social media. So, clearly, the social channel helps with building brand loyalty.
For a master class in social media engagement, check out beauty brands. Some good examples of brands absolutely crushing it on social media include Fenty, Sephora, Kylie Cosmetics, ColourPop, and MAC.
Real-world brand loyalty examples
Some brands are pure rock stars when it comes to attracting and nurturing brand-loyal customers. There’s a lot to learn from them. With that in mind, let’s look at examples of these brand loyalty inspirations.
Apple customers are die-hard supporters. For example, 90% of iPhone users remain with Apple year to year.
Apple never discounts its brand because they don’t need to, leading it to be one of the most profitable businesses on the planet.
They were the first of the major technology companies to focus on aesthetics (while others were focused on ugly beige-box computers back in the day). And they’ve consistently been at the forefront of new innovation. The company’s product launches have often been historic, like when the iPhone revolutionized the entire mobile phone industry or when iTunes changed the course of the music industry.
When the Apple Store launched, it was widely ridiculed as a bad strategic business decision. But unlike big box brands like CompUSA that focused on constant price discounts and sales, Apple focused on the customer experience.
It feels like everything Apple touches is magical. No wonder its brand loyalty is sky-high.
You’ve won the brand loyalty lottery when your name becomes synonymous with coffee. You “get Starbucks.” You don’t “get coffee at Starbucks.”
Starbucks originally won kudos by loyal fans after introducing a “third place” for US consumers to spend time. Beyond the home and office, Starbucks wanted to offer not just a coffee shop, but a place to relax, enjoy and indulge as part of everyday life. (There are many copycats today, but Starbucks was the first.)
Over time, the company introduced loyalty programs, offered music, added food to the menu, and continued to enhance the atmosphere. They also made it ridiculously easy to grab a Starbucks. You can’t go to the grocery store or even a gas station now without seeing Starbucks products.
Ever-evolving creative drink offerings have forever endeared the brand with fans. From Blackberry Cobbler Frappuccino to Caramel Snickerdoodle Macchiato, the company is always thrilling customers with new flavors. If you know any coffee lovers, there’s a good chance they are Starbucks lovers.
Nike has fostered a massive community of fans through an endless flow of marketing that evokes emotional responses.
In its advertising, Nike rarely speaks to their footwear or technology. Instead, their marketing strategy empowers the average person to unleash their inner athlete. As a result, people react viscerally when they put on Nike apparel or shoes. They get chills when they enter a Nike store.
The iconic “Just Do It” campaign is still powerful 35 years after its introduction.
In addition, Nike makes its customers feel special with its exclusive, members-only club. The group offers exclusivity, community, personalization, and a great experience (all pillars of brand loyalty, if you’ve been paying attention).
They use the Nike app, Nike Run Club, Nike Training Club, and SNKRS to offer the community multiple perks like exclusive products, early access to launches, and priority access to sporting events. Across the different membership options, Nike boasts more than 300 million members. Talk about brand loyalty!