Customer Loyalty vs. Brand Loyalty: Why They Matter For Customer Retention and Repurchase Rates

Customer Loyalty and Brand Loyalty: Two Important Aspects of Retention

Though closely linked, Brand Loyalty and Customer Loyalty are actually two very different concepts. This is especially true when it comes to the mind frame of the consumer.

What’s the difference?

The main difference between brand loyalty and customer loyalty is that customer loyalty mainly relates to the overall spending power of consumers. It’s about 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. Brand loyalty has everything to do with how consumers perceive your brand.  This may be through promotional activities, reputation or previous experiences with your company.

clv-kit

Calculate your CLV (Customer Lifetime Value) here

 

In other words, customer loyalty relates to those consumers that keep coming back to your store. It’s about having lower prices than competitors or better discounts for specific products they’re 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. This happens regardless of pricing or other financial reasons.

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

Customer Loyalty and Brand Loyalty Retention Have To Be Addressed In Two 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. In this way it 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. 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.

Want to learn how more about how online businesses are skyrocketing their repurchase rates?

Learn how AI driven automated email marketing have helped a broad range of companies already.

Check out ReSci’s AI email marketing platform: Cortex.

target-logo2


guide-cta