Pursue Brand Loyalty, not just Customer Loyalty
At first glance, both sound the same and do generate the same results: higher returns for the company. However, there is a fine difference between these two concepts.
Customer loyalty refers to when a customer follows your company because of promotions currently offered such as discounts, coupons and other perks. They are loyal to your business only insofar as you offering the best bargain for that week. There is nothing stopping the customer from leaving and going to another business if they will be having better deals next week. Furthermore, this kind of practice is not sustainable in the long run because such pricing strategies will erode the company’s profit margins.
On the other hand, brand loyalty occurs when a customer is loyal to you because of your products or services. These customers are product-driven instead of price-driven and this means that once loyal, they will still be likely to favor your company’s products and services even when prices start rising. More importantly, knowing that more than half of customers are more likely now than five years ago to share their experiences (Dimensional Research), converted customers will become advocates who would in turn aid in the promotional efforts of the company when they endorse the company through their family, colleagues, and friends both online and offline. Through this, brand loyalty is still able to achieve high sales volume, and also bigger profit margins.
How to nurture brand loyalty
Today, in a landscape saturated with advertisements and promotional campaigns, it no longer comes as a surprise that customers increasingly want to be engaged on a more personal level than ever before. In fact, customers favor brands they can self-identify with, which is why companies are currently spending billions each year enhancing their brand image in an attempt to attract customers to follow their brand and become a fan of their products and services.
Tips on building brand loyalty
1. Understand the customers and determine what their needs are. In fact, go beyond that and pre-empt what kind of needs they have before they themselves actually realize it. Using methods such as surveys and reaching out through social media can help garner customers’ feedback and determine what the next best step should be. One good metric to use is the Bain & Company’s Net Promoter Score, which is based on a single question: “How likely is it you would recommend us to a friend?”
Read more: Building Valuable Relationships using Social Media Part 2: Converting users into potential customers
2. Storytelling. It is all about telling a persuasive story that convinces them to purchase your products and services. After gaining a deeper insight into your target market’s wants and needs, develop a story that can connect your products and services with your potential customers. Once customers believe in how your products and services can add value to them, they are more likely to convert and become paying customers.
3. Engaged communication: Nothing impresses a customer more than prompt and regular communication. It makes customers feel important because you have convinced them that your business cares about their satisfaction.