Brand loyalty, a guide to a customer’s loyalty toward the brand
It is the positive association that consumers attribute to a particular product or brand, which is demonstrated through a continuous preference despite the alternatives proposed by competitors: known for a long time in marketing, today, brand loyalty becomes increasingly relevant online and the Web offers new opportunities for companies to improve their image and build meaningful relationships with customers.
What is brand loyalty
Brand loyalty represents the loyalty of the consumer to a specific brand, which derives from a positive feeling perceived towards that brand and is shown concretely in the purchase preferences, oriented mainly and in the first place always towards products and services of the same brand.
In fact, in marketing theories, brand loyalty is also defined as the customary preference of a consumer towards a brand for a certain category of products/services, which is consistently repeated and brings over time, continuously, to prefer the products/services of a specific brand at the expense of those of competitors.
More precisely, US academic Richard L. Oliver stressed in a study published by the American Marketing Association that the loyalty of a consumer is “the commitment to buy again a particular product or service in the future regardless of the influences of the context and the marketing efforts that have the potential to lead to a change of behaviour”.
Characteristics and levels of brand loyalty
Brand loyalty has as a fundamental prerequisite that is customer satisfaction: only a customer fully satisfied with the offer, in fact, will continue to exclusively or preferably use the products and services provided by that brand, at the expense of all others competing in the same product category.
Moreover: loyal customers will buy from the same brand regardless of convenience or price, because they have found something that meets their needs and are not interested in experimenting with the proposals of another brand.
According to the classical theory, the development of brand loyalty is divided into three phases:
- Brand recognition, the initial stage in which the person is aware of the existence of the brand, has a positive feeling towards it, but continues not to discard the purchase of similar products from other brands. It is the moment in which the so-called acceptance sprouts, the conscious will of the customer to choose a specific brand.
- Brand preference, the stage of transition in which the consumer begins to develop a propensity for the brand in analysis, buying the purchase more frequently but continuing, for example if it does not find availability, to apply to products or services of the competitor in the same product category.
- Brand insistence, the last level where the consumer is fully attached to the brand to the point to postpone the purchase, try alternative channels (other stores or eCommerce platforms) or give up if it finds availability, avoiding buying a competitor’s product. It is the sublimation of fidelity, expressed as allegiance or perseverance, with the person who repeats the purchase in the long term not only preferring that brand, but buying it continuously and practically exclusively.
Therefore, a consumer is faithful to the brand when he demonstrates a high aptitude to favor it at the expense of other brands of the same level and category, which is expressed in the repetition of the act of purchase.
Factors determining brand loyalty
There are actually many reasons why a consumer can become loyal to a brand compared to the competition and you can’t list them all without leaving something out; More useful is therefore to say that the reasons that lead a person to develop loyalty to a brand can be as unique as the person himself, but there are certainly common patterns and reasons that can be useful to examine.
For example, a crucial factor (especially at the initial stage) is economic or practical convenience (greater availability than competitors)which, however, is likely to be easily challenged by a change in the strategies of competitors or market conditions.
Some products, then, are related to specific status – we think of Ferrari or Rolex for luxury, just to give the most immediate example – and this means that the person perceives that buying a product of that type offers a pleasant experience. Fundamental are obviously the aspects of trust and sentiment towards the brand – especially in these years, where attention to the even political choices of a company is at very high levels – while the factors related to the sense of community or enthusiasm deriving from the “story” told by that brand are other reasons that can push a customer to clearly prefer a brand over others.
The Aaker brand loyalty pyramid
Ultimately, brand loyalty is not the same and therefore a theoretical scheme is needed to try to identify the process that leads a person to allegiance.
Also in this case, David Aaker – who we already know as Father of Modern Branding and creator of the pyramid for brand awareness – proposes his vision with the brand loyalty pyramid, that identifies five levels of brand loyalty to which correspond as many types of buyers. In summary, the more effective the strategy and strategies performed by a company (and the better the product or service, of course), more customers will find themselves at the higher levels of the pyramid.
At the lowest level of the pyramid – and therefore at the weakest level of brand loyalty – we find the switchers, the unfaithful buyers: they are not loyal to any brand, because for them the brand has a marginal role in the purchase decision while other factors such as convenience, price and convenience are relevant. They have no problem changing brand, hence the English term.
At the top step we find regular buyers (satisfied or habitual buyers): these are people who buy the brand out of habit, in fact, being satisfied and not having particular reasons to change. They are, however, vulnerable to competitors’ offerings, because in the case of additional benefits they would have no difficulty in changing, as well as turning to alternatives when they encounter problems finding their classic brand.
Even more on there are satisfied buyers with switching costs, that is, satisfied buyers for (also) reasons of cost, not only economic: they are customers who have no grounds for dissatisfaction with a brand or its products that can provoke a change, also and especially because of the barriers that make this switch tiring (the time needed, monetary costs, any risks, loss of quality etc). But if competing brands can meet the required conditions or offer additional benefits that exceed the costs of change, they could actually betray the brand because they are not real “fans” (we are still at the level of brand preference).
We go up to the penultimate level with consumers, brand likers, friends of the brand: the buyer begins to be a fan of that brand, developing an affinity based mainly on emotion (and therefore without the possibility of rationally explaining this preference)and this is demonstrated by preferring it to other alternatives for high-quality associations and perception.
At the top of the pyramid of brand loyalty we find involved customers, committed buyers, who have high brand confidence, practically an unshakeable trust (the allegiance), to the point of recommending the brand to other customers. At this level, the brand plays an active role in the daily life of the buyer, who is proud of his association with the brand itself since the brand identity perfectly fits into his personal values – and an attentive and smart brand will reward this buyer with loyalty benefits to ensure it is a two-way relationship.
The value of brand loyalty
Summarizing, brand loyalty is when customers have the opportunity and a good reason to choose another brand but, despite this, they continue to choose the first one for various reasons, not always rationally explainable.
Brand loyalty, together with brand awareness and brand attributes, helps to build brand equity, which is the overall value of the brand and identifies the extent of the power determined by knowledge, positive or negative perceptions and experiences of consumers.
Loyalty, in particular, is an important measure because it estimates the likelihood that consumers will continue to offer their predilection for the brand, which is chosen not only because it is affordable or has an affordable price. In other words, the products of that brand are not only seen as merchandise, but have a special aura that derives from the overall image that that brand has been able to convey.
In the opposite case, when a company or a brand does not have a loyal customer base that buys constantly and continuously, they must compete with other brands on factors such as price and convenience – in terms of marketing, the brand is a commodity – and therefore its strategies must be based on various expedients to try to win customers and, at the same time, not to lose the current ones because of competitors who can offer a better deal.
Brand loyalty is about how consumers perceive a brand and depends on various factors, such as promotional activity, reputation, or previous experience with the company. Loyal consumers believe that that brand offers better service and better quality than anyone else, regardless of the price of the products. These people are also more likely to try other products of the same brand, even if they are slightly more expensive than the previous one or those of competitors (the so-called premium price) – Of course, however, customers at the top of the loyalty pyramid will also start to look around for alternatives if prices rise to an unacceptable level or if the company stops making efforts to engage them.
The advantages of loyalty
No brand can assume that people will want to continue to buy its proposals, even if they are already customers: it is quite easy to lose a customer, and less loyalty a single buyer proof against the brand and its business (if, therefore, it is at the base of the pyramid of brand loyalty levels), the greater the chances that it can suddenly choose a competitor.
If, however, the company is committed to building a sizeable base of truly loyal customers, the business will have a significant advantage: they are consumers who can stay alongside the brand even when times are difficult, that they will not abandon it even if prices rise or the economy collapses.
In addition, these people will also be brand promoters: they will talk about products and services to their friends and family, support them personally and help raise awareness (and, in fact, not involving users is a mistake of brand awareness strategy): all this can have a positive effect on sales promotion, even without a massive financial investment.
In practical terms, then, brand loyalty is useful to reduce marketing costs, attract new consumers and allows you to respond promptly to the threats of competition, studying the right strategy to make innovations later, without losing too much market share thanks precisely to consumers who do not abandon the brand.
It should be clear that having loyal customers is a significant advantage for any business, regardless of the industry in which it operates, the products it sells or the services it offers, including the online world.
How to measure brand loyalty
Building and cultivating brand loyalty at the highest level ensures that the brand is not just a commodity, and knowing what inspires brand loyalty (or what drives customers away) is crucial to making smarter decisions about the strategy to be taken.
At the same time, however, it is important to know how to evaluate and measure brand loyalty, an activity that is usually carried out through surveys, collecting feedback from consumers in the target market (especially those who have purchased in the past), to verify if and how the brand manages to inspire loyalty and loyalty customers, carrying on this activity so period to monitor how loyal customers feel towards the brand and to dig deeper so as to get information about what specifically contributes to that loyalty.
Specifically, the market survey must lead to the discovery of 5 key factors that measure brand loyalty: appreciation, trust, customer satisfaction, perceived quality and perceived value.
How to increase brand loyalty (and the difference with customer loyalty)
Although closely related, there are subtle differences between customer loyalty and brand loyalty: in particular, Customer Loyalty identifies the commitment of customers to continue buying from a company based on the benefits received from such purchases, and is largely based on price, benefits and rewards – that is, the more value or benefits a customer receives, the more likely they will buy from that company in the future.
Instead, factors such as experiences, association values and brand perception drive brand loyalty and therefore drive customers to continue buying from that company regardless of price or competitor.
Therefore, customer loyalty can be encouraged and improved by keeping overall prices low and offering regular loyalty discounts, special offers or multi-purchase offers, which convince regular customers that the brand is still the cheapest and most advantageous on the market, preventing them from buying their products elsewhere. Customer loyalty mainly concerns the overall spending power of consumers and is built by proposing regular prices and savings offers to convince them to return to the store, thanks to lower prices than competitors or better discounts for the specific products they are looking for.
On the other hand, brand loyalty is more difficult to build, but it is much easier to maintain once established: as long as the quality of the product and the level of service provided remain the same, customers loyal to the brand will feel little need to control the competition. In this sense, brand loyalty is less risky than customer loyalty – but, in financial terms, loyal customers tend to make fewer purchases, although the profit margins on the products they buy tend to be much larger.
However, bringing a person to the top of Aaker’s pyramid does not mean that he will be “forever loyal”: customers can leave a brand for various reasons, for example if the same brand no longer meets or is not aligned with their needs, or if consumers lose confidence in the brand’s ability to deliver value.
The construction of brand loyalty
The techniques for building and strengthening brand loyalty are varied but are almost always based on engaging people.
The first advice is to interact authentically with customers and provide quality customer service: people want to know that they are being heard when they talk to the brand, regardless of whether they address with criticism, praise or other needs, and should not perceive that those who speak on behalf of the brand are only concerned about avoiding public relations issues. Whether it’s social media, a phone call or something else, support needs to respond carefully, diligently and patiently, because being able to handle an angry customer can be an opportunity to build loyalty (while not doing so could make it run towards the competition).
Loyalty must not be taken for granted, it can always disappear, and it is good to think of methods to reward trust; at the same time, as explained by the pyramid of brand loyalty, the answer must not be the same for everyone. Loyalty rewards and loyalty programs are a common means of thanking users and can also become a tool to push people to level up in the program and pyramid itself.
Turning to some aspects related to the Web and digital presence, it is obviously important to pay attention to reviews and customer feedbacks, as reiterated on various occasions, including through surveys or follow-up questionnaires after the sale. Equally trivial is the advice to focus on the prudent use of social media, evaluating the actual platforms used by the target audience and trying to interact with people in an effective and context-appropriate way.
Brand loyalty and Web
Speaking of the Internet, before the great development of the Net the most common way to build loyalty to the brand was through the direct interaction between a seller and a customer; but today we have access to thousands of consumer products and services without the seller as an intermediary, and consumers are free to conduct independent research, compare competitors’ offers and make informed choices, thus becoming less committed to specific brands.
And so, as the Web offers the power of choice, companies have “moved from a brand-centric agenda to a customer-centric model“: in order to gain market shares and retain customers, the emphasis is on building relationships with customers, by providing excellent customer service and value. And the Internet also becomes the tool to reach people, both in terms of contact through social media with which to promote the brand, improve relationships and accept feedback, and creating various experiences also exploiting the company website.
The reasons for losing loyalty
A recent Clarus Commerce study (summarized here) based on a survey of 2,500 people in the United States reveals the factors that can drive a consumer to lose brand loyalty.
In particular, if the supply of high-quality products, a strong sense of community and better prices are the positive elements in building loyalty, to alienate people (about 65% of responses) is the decrease in product quality, while for almost half of users a price increase may push to try alternative products.
The majority of consumers also believe that brands are effective in raising awareness on important issues and influencing policy – even if they tend to believe that brands are taking a stand on social topics for purely economic reasons, for image, for marketing purposes or because they are “jumping on the bandwagon of the winner”: one person in three states that they are likely to lose their loyalty to a brand if they take a position on a social issue they disagree with, while about 1 in 6 also claims to lose their loyalty if they feel that a brand is not up to the values publicly declared.
In most cases, respondents indicate that their favorite brands are in line with their own values, particularly regarding environmental and green practices (52%), employee treatment (51%), gender equality (49%) and racial justice (48%). Interestingly, young consumers are more aware of the values and social positions of brands than older consumers.
As said, then, the brand loyalty also serves to expand the user base and this report confirms it: 76% of people admit to be based on the opinions of friends and family and the classic word of mouth when making a purchase decision, and this also affects the same future loyalty more than media coverage (50%) and political opinions (54%).