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.
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.
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