Brand Loyalty > Advertising

You are the owner of a local coffee shop and bakery that has been in business for about five years. Business has been growing and steadily increasing; people seem to be in favor of the great selection of products, the prices, and customer service. However, a new coffee shop has recently opened about a mile down the street, and business has been decreasing ever since. It seems that the competitor has better deals than you, so people have been favoring the new place over yours.  

What went wrong here? There was a lack of brand loyalty.  

When a consumer is loyal to a brand, customers won’t leave because of a better deal down the street. An engaged customer will pay a higher price if they have a more genuine relationship with the brand. As a business owner or someone in a position of leadership, it is imperative that you give your customers, employees, and partners a reason to stay. 

As the marketplace becomes increasingly more saturated, and as people are bombarded with the noise of excess information and constant advertising, people need even more of an incentive to choose one brand over another. Brand loyalty is the solution to this problem. 

Forbes says that loyalty is becoming one of the few sustainable ways to consistently earn an advantage over competitors in the marketplace (Little, 2022, para. 2). 

The issue with many brands or companies is that they think having a loyalty program means they have achieved brand loyalty. This could not be further from the truth. True loyalty moves beyond rewards programs and punch cards. True loyalty is marked by high engagement and meaningful relationships. 

What is engagement? Engagement occurs when an individual has a meaningful, emotional connection with a brand that leads to high participation and long-term relationships (Paharia, 2013, p. 15). 

True, genuine loyalty can be achieved by “combining the latest research on human motivation with the big data generated by your customers, partners, and employees...” (Paharia, 2013, p. 10).  

There are three main components to achieving loyalty: motivation, big data, and gamification. Having an understanding of what motivates people to support a company long-term can become a tool to influence your supporters to remain loyal to yours.  

The emergence of new technologies over the past two decades has enabled companies to collect and analyze more data about their consumer base, allowing them to better understand their customers’ behaviors and preferences and subsequently target them more effectively. 

Why is loyalty so effective? People are much more likely to recommend a brand to a friend when they’re loyal customers themselves. This benefits a company because that means less money has to be spent on advertising; your loyal customers are doing the advertising for you! 

Additionally, someone who’s loyal to a particular brand will continue to purchase from them. This means that most of a business’s profits are made from loyal customers as opposed to one-time or new customers (Little, 2022, para. 8). 

So, if you want to save money on marketing, decrease your attrition rate, and create meaningful relationships with the people who support your business, forget about overused rewards systems. Putting in effort to cultivate genuine brand loyalty will require work but will be much more rewarding in the long run.