Brand Loyalty: The Definitive Guide [2020]

Brand Loyalty Definitive Guide

Every marketing team dreams of building brand loyalty.

To attract a core group of committed customers who will be there for every:

  • Release
  • Update
  • Sale
  • Event

All while singing your brand’s praises to their friends.

But how do you turn your brand loyalty dream into a reality?

Well, today we are going to show you exactly how to do it.

We will explore not only what brand loyalty is, but show you examples of brands who have reached it, and the psychological principles that underpin it all.

Let’s get into it.


What Is Brand Loyalty In Marketing (And What Does It Mean For Marketing Teams)?

Brand loyalty is a customer’s commitment to purchase products or services from a brand, and not from their competitors’.

Consumers also display brand loyalty through:

  • Word-of-mouth marketing
  • Use of loyalty schemes
  • Unpaid referrals and advocacy

Brand loyalty is established when you create an emotionally-driven psychological connection between your brand and the customer.

You achieve this when you correctly align your brand messaging with your customer’s:

  • World view: such as political stances, current issues, or vision of how the world is (or should be)
  • Sense of self: such as reaffirming their current state, or helping them to achieve their aspirations

56% of customers say they are loyal to brands who “get them”; the ones who make them feel how they want to feel.

You can see this phenomenon in lots of well-established brands across a wide range of industries. Here are three of our favorite examples:

  • Lush: believe in eco-friendly cosmetics without animal testing
  • Moleskine: aspire to be part of the “creative class”
  • In-N-Out Burger: believe that the best fast food is simple

You will likely have people in your circles who are loyal to one of these brands (or brands like them) and have seen how fervent these people are in promoting their brand.

brand loyalty anthony bourdain in-n-out

That is why numerous brand loyalty statistics show it can have a real impact on your brand’s bottom line. In fact:

  • 43% of customers spend more with brands they are loyal to
  • 5% more brand loyalty can increase profitability by up to 125%

Okay:

That was a lot of pure theory to take in. So, let’s bring this topic to life by looking at a brand loyalty example, from a brand that has successfully built an army of fans.


Brand Loyalty In Action: Dollar Shave Club’s Well-Groomed Tribe

Dollar Shave Club is a subscription-based male grooming company based in Los Angeles.

You may remember them from this advert that went viral in 2012 and led to 12,000 orders in the two days after it was released:

They have built an incredibly loyal following of over three million repeat monthly subscribers in the USA, Canada, Australia, and the UK.

Many of these customers are happy to share their experiences on social media:

Dollar Shave Club’s levels of brand loyalty enabled them to sell to Unilever for one billion dollars in 2016, and the brand has continued to go from strength to strength.

But how did they cultivate this brand loyalty?

It started by taking a stand against the current male grooming industry. They targeted people who no longer wanted to overpay for razor blades.

brand loyalty dollar shave club stand

They then set their prices to the exact opposite of the rest of the industry. You could purchase a Dollar Shave Club subscription for just $1 a month with top-tier pricing at $10 a month.

This was a smart move as 92% of customers ranked price and value for money as reasons for staying loyal to a brand.

Dollar Shave Club then began offering a customizable service. Customers start by taking a quiz to discover what products they need:

brand loyalty dollar shave club quiz

Customers can then create their own unique subscription box experience by choosing:

  • Products
  • Delivery dates
  • Delivery frequency

As you will see in the next section, customization can play a huge role in curating brand loyalty.

Finally:

Dollar Shave Club creates high-quality content that reinforces their brand message, engaged their customers, and provides solutions to common problems.

https://twitter.com/DollarShaveClub

54% of customers say engaging content is an important factor in their brand loyalty.

Put all of these pieces together and you create the perfect storm for brand loyalty. But, how can you begin to cultivate this for yourself, and create a powerful connection to your customers?

Well, there are two schools of thought on this. Let’s take a closer look.


The Psychological Side Of Brand Loyalty

Brand loyalty is a psychological effect.

Your customers need to feel an emotional connection to your brand to develop loyalty. But how does this happen?

There is no definitive answer to that. However, there are two methods put forward by two prominent business schools on how you can do it.


The USC Approach — Conscious and Subconscious Connections

Researchers from USC theorize that five “core branding dimensions” influence loyalty.

When used together these create your brand’s personality and provide context for your messaging within the customer’s world view or sense of self.

The core dimensions are:

  1. Sincerity
  2. Excitement
  3. Competence
  4. Sophistication
  5. Ruggedness

You could, theoretically, focus on any combination of these depending on your brand’s niche.

For example:

Customers looking for outdoor clothing, like those from Jack Wolfskin, may be looking for:

  • Competence: will these clothes cope in challenging climates?
  • Ruggedness: will they add for their “outdoorsy” self-image?

Whereas customers looking to book a vacation in Italy, like those offered by Intrepid Travel, are likely looking for:

  • Sincerity: are they honest about what they offer?
  • Excitement: do they help to build anticipation for the trip?
  • Competence: do they follow through on their promises?

These elements are supported by your creative materials.

By using the right combination of words and colors, you can create conscious and subconscious connections to your brand.


The HBR Approach — The 5P’s Of Relevance

Harvard Business Review argues relevance leads to loyalty. The more you can connect with the needs of a customer’s life, the more loyal they will become.

Relevance is created using the 5 P’s

  1. Purpose: customers share the brand’s values and a shared mission
  2. Pride: consumers are proud to perpetuate the brand’s image
  3. Partnership: consumers feel a connection between them and the brand
  4. Protection: consumers feel safe doing business with them
  5. Personalization: consumers feel experiences are tailored to their needs

We can easily use this approach to break down the strategy used by Dollar Shave Club.

They have:

  1. Purpose: save money on shaving
  2. Pride: people want to share their association with the brand
  3. Partnership: the brand seeks out their customer’s opinion
  4. Protection: their service is safe and reliable
  5. Personalization: delivery and product needs can be tailored to the customer

This brand of psychology is arguably best suited to online business models, such as ecommerce, where there are fewer physical interactions with a brand.


To Build Brand Loyalty, Take The Best From Both

Both of these approaches aim to achieve the same outcome:

Create an emotional connection with the customer.

brand loyalty build connection with customer

As such, it can be beneficial for you to take elements from both of these approaches. Why?

Because there is lots of evidence to show brand perception is influenced by:

But the functionality and practicality of the five P’s should also influence how you craft your brand message, products, services, and supporting content.

It can also be useful to leverage these frameworks to consistently benchmark where you are with your branding, and to see if there is room for improvement.

Speaking of which:

Let’s take a look at how you can start to implement these principles into your marketing team’s strategy.


Brand Loyalty Marketing: How To Build An Evergreen Base Of Customers

In this section we are going to look at how you can apply the psychology of brand loyalty.

These principles draw from both the USC and HBR theories to give you a strong foothold.

We will look at the following principles:

  1. Consistency
  2. Personalization
  3. Collaboration
  4. Responsiveness
  5. Value

If you can tick all of these boxes, you will be well on your way to building a legion of raving fans.


1. Be Consistent

Brand consistency has a powerful influence on how consumers choose brands. And, brands with loyal customer bases are consistent in everything they do. Why?

Because consistency builds trust.

By creating a customer experience that is reliable and familiar to your customers, they are more likely to turn to you when they need what you supply.

This is why brands like Nike and Apple choose to have stores, websites, hotlines, and social feeds that always feel the same.

Brand consistency applies to:

For example:

Greats, a Brooklyn-based footwear brand, creates a consistent experience between their Instagram feed and its website homepage:

brand loyalty brand consistency greats example

If you would like to learn more about this topic, you should check out our free guide, Brand Consistency: The Art and Science of Building Trust.


2. Make It Personal

The more you tailor your brand to your customers, the better.

Your brand is at its best when it feels like an inside joke between the two of you; that everything you say or do is meant for them.

You can create this feeling on both a product and a marketing level.

For products, this could be:

  • Personalization options (delivery times, different packages, etc.)
  • Customization options (unique product creation, exclusive designs, etc.)
  • Recommendations based on past purchases
  • Adding handwritten messages to deliveries

Ideally, what you do will give your customers a sense of ownership, or the feel of a personal touch, during the product creation process.

For marketing, this could be:

  • Adding names to marketing materials (Dear Noemie/John vs. “The Home Owner”)
  • Targeting ads to smaller audiences with specific traits (“Are you a resident of ____?”)
  • Quizzes or consultations to pair customers with the correct products

The more specific your marketing is, the more customers will feel like you “get them”, and they will, in turn, be more likely to become brand loyal.


3. Collaborate With Peers 

Another great way to cultivate brand loyalty is to collaborate with brands or causes relevant to your customers.

Where there is an overlap between your two customer bases, there is great potential for a collaborative marketing campaign that can galvanize your current base:

brand loyalty collaborative marketing

For example:

  • Cause-driven brands can work with charities (e.g., Lush’s Charity Pot Lotion that generates donations)
  • Furniture brands can partner with sound system brands (e.g., IKEA and Sonos’ SYMFONISK speaker)
  • Culture-driven brands can pair with other relevant culture-driven brands (e.g., Chubbies Shorts x Star Wars clothing range)

These collaborations are excellent ways to connect with your customer’s world view or sense of self. Especially if they have had previous interactions with your collaboration partner.

If you would like to learn more about this topic, you should check out our Definitive Guide to Collaborative Marketing, where we show your marketing team can implement this strategy.


4. Be Responsive

Your brand needs to be accessible and responsive on all channels.

Whenever a customer contacts your brand, they should be able to receive a response from a real human being. Not doing this can drive customers away!

It can be useful to have elements to help your customers help themselves, such as chatbots or support guides. But customers like to know there is a real person to contact if they need to.

First Direct, a bank in the UK, drives high levels of brand loyalty by putting a focus on this:

brand loyalty first direct responsiveness

This has led their customers to consistently put them at the top of national polls for the best bank, with 85% of customers who responded, referring them to friends.

Here is a review of the bank from Money Saving Expert, the UK’s most trusted source for financial information:

brand loyalty first direct review

The emotional connection that inspires brand loyalty is often best driven by a human connection.


5. Focus On Value

Finally, let’s talk about value.

Your marketing team’s focus should be on delivering the most value to the customer.

Your customer should never feel like you are doing something for the sake of it. Each of your marketing actions should be:

  • Relevant to the customer
  • Improve the customer’s life
  • Enhance their experience of your product

This is where content creation — especially for social feeds — really comes into its own.

If you want to learn more about how your marketing team can shift their focus to value-driven marketing, we recommend you take a look at our Introduction to Agile Marketing.


Brand Loyalty In A Nutshell

Brand loyalty is a customer’s commitment to purchase from you and not your competitors. It is a psychological connection between your brand and the customer.

This connection can be fostered in two ways:

  • The USC Approach: by creating conscious and subconscious connections
  • The HBR Approach: by using the five P’s to create relevance

Brand loyalty can benefit your brand and marketing team in many ways. Research shows that profit margins, engagement, and word-of-mouth referrals all increase with loyal customers.

You can begin to cultivate brand loyalty by utilizing:

  • Brand consistency
  • Personalization
  • Collaboration
  • Responsiveness
  • Value-focused marketing
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