brand loyalty

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

Though closely linked, brand loyalty and customer loyalty are actually two very different concepts. While different, they both directly impact customer retention and repurchase rates.

What Is Customer Loyalty?

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. 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.

Do You Have a Loyalty Program?

If you don’t, then it’s time to seize the day! With the future demise of the third-party cookie, loyalty programs can provide a whole new level of value, in the form of zero-party data. You can reward the customer with points, badges, or special offers directly through your program, and boost your ability to deliver a highly personalized customer experience.

What Is Brand Loyalty?

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. Consumers are loyal to a brand because they believe you offer a better service and higher quality than anyone else. This happens regardless of pricing.

A brand-loyal customer is also more likely to try out other products from the 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 to an unacceptable level or if you stop making efforts to engage them.

Related content: Learn how to calculate your CLV (Customer Lifetime Value).

How To Boost Customer Loyalty and Brand Loyalty

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 remain 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.

Related content: Top 10 Customer Retention Tactics for the Data-Driven Marketer

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.

How are ecommerce businesses skyrocketing their repurchase rates? Learn how AI-driven automated email marketing has helped a broad range of companies.



Download Data-driven marketing guide

ReSci is a team of marketers and data scientists on a mission to democratize AI. We make powerful recommendations and predictions accessible to brands.

Request a demo


Did you find this useful? Share it on social media.