Two types of loyalty are fundamental to businesses: customer loyalty and brand loyalty. While they're two separate concepts, the common denominator is that they're both indispensable to customer retention. Let's go over customer loyalty vs. brand loyalty — the difference between the two, and why they have to be addressed in distinct ways.
What’s Customer Loyalty?
Customer loyalty is born from excellent customer satisfaction — it’s when a customer has such a positive experience with your brand and products, that they’re willing to buy or work with you time and time again.
What’s Brand Loyalty?
Brand loyalty happens when a customer identifies with your brand on a personal level. They either consciously or unconsciously purchase from your brand repeatedly because they know your products or service will meet their expectations.
Customer Loyalty vs. Brand Loyalty
The main difference between these two loyalty types is that customer loyalty revolves around customer spending, and brand loyalty is all about customer perception. Customer loyalty can be formed by having lower prices than competitors or better discounts and rewards programs.
With brand loyalty, pricing isn't as big of a factor — customers feel that your brand is trustworthy and high-quality compared to all others. Customers with brand loyalty are more likely to try out other products from the same brand, regardless if they're more expensive or not.
While these distinctions are subtle, they can help provide a higher return on investment (ROI) if they’re both consistently built over time.
Maintaining Customer Loyalty and Brand Loyalty
Brand loyalty requires less effort to maintain once established. If your product and service quality remains the same throughout time, customers won't be motivated to scope out your competitors. While brand-loyal customers don't usually purchase as many items, the profit margins on the things they do buy are generally larger.
Customer loyalty requires more work, in that you’d have to put more effort into establishing promotions, rewards programs, and more.
In the grand scheme of things, it's not a matter of customer vs. brand loyalty because they're equally crucial to your business. Acquiring new customers can cost five to seven times more than retaining existing customers.
Below are some tips on how to target both so that you can combine the two concepts.
Tips to Keep Customers Loyal
- Build a simple rewards program. For example, you can create an easy points-based system for your customers — the more they buy, the more rewards they can earn, such as discounts or freebies. Note that while points-based loyalty programs are common, it depends on your business. If your business operates off infrequent and expensive purchases, a tier-system rewards program might be a better option.
- Create a community for your customers. People trust their peers more than advertisements and businesses. Create a community that encourages customers to communicate with one another about topics pertaining to your industry to perpetuate brand advocates. For instance, AdRoll has the Growth Guerilla Collective (GGC), which brings direct-to-consumer (D2C) brands together to discuss all things marketing.
- Make your customers feel special. This advice is probably a no-brainer, but you know that feeling you get when you receive a holiday card or birthday present from a friend? Well, try to give your valuable customers that the same feeling. Take note of holidays, birthdays, and special occasions, and treat customers in the form of a letter, email, discount, or whatever you think would make them smile.
Tips to Boost Brand Loyalty
- Create high-quality content. Your products or services may be high-quality, but if you want to establish brand loyalty, your content has to be, too. The content you produce should inform, engage, and educate. Be sure to social proof your content with key players in your sector to further cement your brand as the best in the business.
- Partner with other brands to provide exclusive offers. When customers feel emotionally connected to a brand, their lifetime value increases by almost 4x. One of the ways to deepen brand loyalty is by providing a compelling brand experience, and an excellent way to do this is via brand partnerships. (If you want to learn how to build partnerships as a D2C brand, read more here).
- Make sure your brand is consistent. It’s hard to maintain a sense of brand loyalty if people see that your messaging and branding is all over the place. From words and design to your offerings and perspective, brand consistency is a massive factor in building brand awareness and trust. According to Patti Doyle, COO at Vennli, “Customers are looking for brands they can trust. And, they want to have similar brand experiences time and time again. Consistent messaging and alignment around common goals will help drive brand loyalty.”
Now that you know the distinctions between customer loyalty vs. brand loyalty, it's time to learn more about customer marketing strategies.