Customer Loyalty vs. Brand Loyalty

Customer Loyalty vs. Brand Loyalty - Retention Science

Customer loyalty and brand loyalty are two very important aspects of business retention. Though closely linked, they are actually two very different concepts, especially when it comes to the mind frame of the consumer.

The main difference between the two is that customer loyalty mainly relates to the overall spending power of consumers and what you can offer them in terms of regular prices and money-saving offers. Brand loyalty, on the other hand, has very little to do with prices or money, but has everything to do with how your brand is perceived by the consumer, whether through promotional activities, reputation or their previous experiences with your company.

In other words, customer loyalty relates to those consumers that keep coming back to your store because you have lower prices than the competition or better discounts for specific products they are looking for. Consumers who are loyal to a brand remain customers because they believe you offer a better service and higher quality than anyone else, regardless of pricing or other financial reasons.

This type of customer is also more likely to try out other products from the same brand, even if they are slightly more expensive, whereas consumers on the customer loyalty end of the spectrum will certainly be tempted to shop around if your prices go up or if you stop sending a monthly newsletter.

Similarly, customer loyalty and brand loyalty retention have to be addressed in two very distinct and separate ways. Customer loyalty can be encouraged and improved by maintaining overall low prices and offering regular loyalty discounts, special offers or multi-buy deals. This will convince your regular customers that you are still the cheapest merchant on the market and will prevent them from purchasing their products elsewhere.

Brand loyalty, on the other hand, is much easier to maintain once established. As long as your product quality and the level of service you provide remains the same, brand-loyal customers will feel little need to check out the competition. In that sense, brand loyalty is less risky than customer loyalty and requires little effort to keep. On the flip side, however, brand-loyal customers tend to make fewer purchases, although the profit margins on the products they do buy tend to be a lot bigger.

All in all, customer and brand loyalty are equally important and businesses should aim to target both by using different types of products in their range. By combining the two concepts in your marketing strategy, your revenue will rocket like never before.

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