If ever there were a telltale sign of a successful business, it is brand loyalty.
Brand loyalty means you don’t just have customers, you’ve got customers come back for more. And not only do those customers come back for more, they’re usually willing to pay more s well.
Brand loyalty means you’ve got customers who avidly tell their friends and family about you. Customers who’ve decided they’re unwilling to settle for any other brand.
That’s the power of brand loyalty.
But what is the definition of brand loyalty? And why is it so essential to the growth of your business?
In this post, we take answer these questions and more. We define brand loyalty, look at some brand loyalty examples in some of the world’s most successful brands, and show you how to build the type of brand loyalty that turns customers into diehard fans.
CONTENTS
- What is Brand Loyalty?
- What’s the Difference Between Customer Loyalty and Brand Loyalty?
- The Benefits of Brand Loyalty
- The 3 Levels of Brand Loyalty
- How to Build Brand Loyalty
- Brand Loyalty Examples
- The Takeaway
What is Brand Loyalty?
Brand loyalty is the allegiance that drives a customer to faithfully return to a brand’s products or services, regardless of competitive factors like price or convenience.
Brand-loyal customers are buying more than products or services. They’re buying a reliable experience, a way to express themselves, membership in a tribe. In a word, they’re buying a brand.
Brand loyalty is closely tied to brand affinity, which is when a customer believes a brand is aligned with their values or worldview.
What’s the Difference Between Customer Loyalty & Brand Loyalty
Key to any brand loyalty definition is the difference between customer loyalty and brand loyalty. While the two ideas are often confused or used interchangeably, there are important differences between them. Let’s break them down.
Customer loyalty is a transactional relationship based on prices.
Loyal customers have decided that the products or services you offer meet their needs within their budget. They’re satisfied with your offerings and are likely to return, unless they come across another product or service that provides equal or greater value at a better price. Customer loyalty can be fostered through incentives like discounts, rewards programs, and targeted marketing.
Brand loyalty, on the hand, is an emotional relationship based on experience.
Brand-loyal customers identify with your brand on a personal level. The value they get from your products or services goes beyond features or benefits. Buying your products or services says something about them—not just as a customer, but as an individual.
Most importantly, brand-loyal customers are very unlikely to be persuaded away from your brand by the promise of better prices—or even better quality!
Brand-loyal customers make purchasing decisions not from a rational or pragmatic perspective, but from an emotional one.
Take a Coke drinker versus a Pepsi drinker. Blind taste tests have shown that even the most loyal Coke drinker can often be confused as to which soda they’re tasting. You might conclude that there’s little difference between Coke and Pepsi in the minds of consumers.
But try telling that to a brand-loyal Coke customer! They’d probably look at you like you had two heads.
The same could be said for brand-loyal Apple customers versus Samsung customers. Or Ford versus Chevy.
Brand-loyal customers simply aren’t interested in the real-world differences between their choice and the alternative. Or they’re willing to sacrifice on price or quality for the irreplaceable feeling they get from their favorite brand.
The Benefits of Brand Loyalty
You’re probably starting to get a sense of why brand loyalty is so valuable to your business.
It’s one thing to have a loyal customer base. It’s another to have a cadre of fans that would simply never consider buying a different brand. That’s the mark of true brand affinity.
Let’s take a closer look at why brand loyalty is important by unpacking a few of the most tangible benefits of brand loyalty. Especially when it comes to moving the needle on your business’s growth.
Boost Profit & Revenue
In terms of your business’s bottom line, there are few things more valuable than brand-loyal customers. Brand loyalty is proven to result in lower customer acquisition costs, more referrals, and higher new-product adoption rates.
A study by Harvard Business Review found that businesses with high loyalty scores were able to grow their revenue 2 ½ times faster than their competitors. The same study found that brand loyalty translates into 5 times more shareholder returns over 10 years.
Brand-loyal customers are also usually the most enthusiastic early adopters. Nielsen found that 3 in 5 people say they’d rather purchase a new product from a brand they know than from an unfamiliar brand.
Increase Customer Lifetime Value
Brand loyalty is especially relevant in a modern world where customers are bombarded by advertising and marketing all day long, at every turn.
Our attention spans are shorter than they’ve ever been; we’re constantly distracted by shiny new things in every channel, from our email inboxes to our social feeds to the shelves at brick-and-mortar stores.
Despite the noise in the marketplace, more than two thirds of U.S. customers report that they’ve remained loyal to a brand for 10 years or more. That’s how powerful brand loyalty can be.
According to one study, a 7% increase in brand loyalty translates into 85% higher customer lifetime value (CLV). Lifetime brand-loyal customer mean reliable repeat purchases with zero acquisition costs.
Foster Sustainable Business Growth
The type of business growth that brand loyalty leads to isn’t just impressive, it’s sustainable over time. This is because brand loyalty tends to compound over time.
The more familiar we are with a brand, the more likely we are to trust it. The more we trust it, the more likely we are to purchase it. Another way to look at it is, the more a brand delivers on its brand promise, the more loyal we become.
Not only do brand-loyal customers tend to spend more than other customers, especially over the lifetime of their relationship with a brand, they’re less price-conscious than other customer, as well.
Key to sustainable business growth is the ability to raise prices without the risk of losing customers. This combination of customer retention and pricing power is exactly what brand loyalty provides.
Increase Marketing Efficiency
One of the most underrated benefits of brand loyalty is the fact that it makes your marketing efforts infinitely more efficient.
Why? Because every brand-loyal customer you have is like a prism that magnifies your promotional messaging tenfold.
As proud brand ambassadors, brand-loyal customers are more likely to repost your social media content or simply tell their social circle about how much they love your products or services.
One survey found that almost 60 percent of brand-loyal customers refer friends and family to their favorite brands.
Few things are more powerful than word-of-mouth marketing. Research show that we are uniquely swayed by social proof. When other members of our tribe have had a positive experience with a brand, we’re much more likely to try it ourselves.
The 3 Levels of Brand Loyalty
We’ve already explored the difference between customer loyalty and brand loyalty and seen that it’s essentially a difference of degree.
Loyal customers prefer your brand if quality and price are equal, while brand-loyal customers are unlikely to settle for any other brand.
Another way to look at this distinction is what is commonly known as the 3 levels of brand loyalty.
As we’ll see below, each of the 3 levels of brand loyalty is a progression, from recognition to preference to insistence, that maps to the process of cultivating a brand-loyal customer. Let’s take a closer look.
1. Brand Recognition
The first level of brand loyalty is brand recognition. At this stage, customers recognize your brand when they see it on a shelf or in an advertisement.
The simple act of recognition is an important step in the branding process. From brand names and taglines to logos and colors, each element of your brand is designed to spark the simple act of recognition.
And with recognition comes another key element of branding: association. The moment we start to recognize a brand is the same moment we start to develop the brand associations we will attach to it. These associations can be products or service themselves (when I see the Toyota brand, I think automobiles) or they can be brand attributes (when I see the Toyota brand, I think practical and reliable automobiles).
First impressions are critical in brand recognition. That’s why it’s so important to have not just a robust marketing strategy, but a consistent and cohesive brand experience across channels and touchpoints.
2. Brand Preference
The next step in brand loyalty is what’s known as brand preference. Brand preference is essentially the same thing as customer loyalty.
Brand preference occurs in a customer who prefers to purchase your brand when all else is equal. This includes price, quality, convenience, etc.
A customer at the brand preference level can still be swayed by alternative brands, however. These types of customers are particularly susceptible to pricing strategies like introductory promotions and free shipping.
The danger is that brand preference can be fickle and ephemeral. If a customer is persuaded to try a competitor brand because of a promotional deal, they may end up switching their preference to that brand if they find its benefits outweigh the benefits offered by your brand.
3. Brand Insistence
The final level of brand loyalty is brand insistence. This is the platonic ideal of brand affinity—it’s what we mean when we talk about brand-loyal customers.
At the brand insistence level, competition is no longer relevant. When a brand-insistent customer thinks of your industry, they think only of your brand. The idea of settling for an alternative isn’t even a consideration. A brand-insistent customer would rather go without than go with an alternative.
We’ve already seen some examples of brands who have cultivated this level of brand loyalty (and we’ll explore more in our final section on brand loyalty examples), but suffice it to say that at the level of brand insistence, customers are no longer buying a product or service. They are buying a brand—and all of the associations that come along with it.
When I buy from Apple or Subaru or Delta as a brand-loyal customer, I’m buying membership into an in-group or tribe. These brands say something about me—not just as a customer but as a person. Brand-insistent customers are insistent because the brands they buy are extensions of their personality.
How to Build Brand Loyalty
So, how do you move your customers from brand recognition to brand preference to the ultimate end state of brand insistence?
As you can probably imagine, it doesn’t happen overnight. Building true brand affinity takes time and money. As you can also likely imagine, it’s worth every penny and second you can afford.
Let’s take a look at handful of proven ways to build a brand-loyal customer base.
Talk to Your Customers
The first step in building brand loyalty is one that so fundamental, it’s a wonder why so many brands think they can skip it.
Understanding how to move customers from brand recognition to brand insistence starts by simply talking to them.
Reach out to 10 of your best customers, set up some customer interviews, and ask them a handful of questions like:
- Why did you choose us over the competition?
- Why do you keep coming back?
- What do we do best as a brand?
- What could we do better?
Use the answers to correct for your brand’s weaknesses and capitalize on its strengths—both in terms of what you offer and, just as importantly, how you communicate the benefits of your offerings in unique and personal brand messaging.
At the end of the day, customers are loyal to brands they identify with. And talking to your customers is the only way to align the character of your brand with the character of those you serve.
Build a Robust Brand Strategy
Building a foundation for true brand loyalty also requires understanding who you are as a brand, from the inside out.
This means building a robust brand strategy, including defining core ideas like your:
It’s hard to overstate the importance of putting in the work to define your brand strategy before you put in efforts to bolster brand loyalty.
Only by having a comprehensive, cohesive brand strategy can you hope to build a brand that’s more than just the sum of its offerings.
Your brand strategy defines what’s most important to you as a business, what you stand for at the end of the day, and what you promise to your customers.
These are the essential ingredients of brand loyalty. As we’ve seen, brand affinity is about more than just features and benefits. It’s about customers who see themselves in the brands to which they’re loyal.
If you haven’t clearly defined who you are as a brand—including things like your purpose, positioning, and personality—you can’t expect customers to see anything worth identifying with.
Engage With Your Audience
Once you have a clear understanding of what your customers want and who you are as a brand, it’s time to bridge the gap by proactively engaging your target audience.
Brand loyalty is ultimately the upshot of a deep and personal connection between a brand and its customers.
The best way to build these connections is by building a community around your brand. This means actively engaging customers on your social media feeds and encouraging engagement on your posts.
It means reaching audiences in their email inboxes—still one of the most powerful sales and marketing channels on the planet—with a regular newsletter catered to their needs.
It means events and promotions that fuel brand recognition, stoke brand preference, and offer special benefits for brand insistence.
Personalize Your Marketing
Part of building a brand that customers identify with is making your brand feel personalized at an individual level.
This includes everything from using the first names of customers in marketing emails to offering personalized birthday messages and promotions.
One study found that almost 80% of senior marketers who surpassed their revenue goals had personalized their brand loyalty marketing.
Personalized brand loyalty marketing is one of the easiest ways to ensure your messaging resonates with audiences on an emotional level. It’s proven to increase customer trust, which is one of the cornerstones of brand loyalty.
Offer Brand Loyalty Programs
Another proven way to foster brand loyalty is through programs that reward customers for repeat purchases and/or referring friends or family.
Rewarding recurring purchases is a cost-effective way to promote the type of customer loyalty that might ultimately lead to brand loyalty. What types of added incentives could you offer customers each time they decide to purchase from you?
Referral programs are another great way to incentivize the type of brand ambassadorship that is a hallmark of brand loyalty.
When customers are incentivized to spread the word about your brand, it can promote feelings of brand preference where they didn’t previously exist.
Brand Loyalty Examples
The best way to truly understand the power of brand affinity is to see some real-world examples of brand loyalty in action.
Let’s take a look at how some of the world’s top brands have cultivated—and capitalized on—brand loyalty to build juggernaut brand experiences.
One of the surest signs of brand loyalty is when a brand has all but cornered the market on its products or services.
Such is the case with Google, which is not only the world’s default search engine, it’s also become synonymous with the act of looking up information online.
How did Google generate such impressive brand loyalty? By offering a friendly, uncomplicated brand experience whose streamlined simplicity betrayed an increasingly powerful tool.
For most people, this has meant that when they want to find something online, they don’t ever consider a website other than Google.
Of course, one of the most valuable lessons to learn from Google was that the company wasn’t content to stop with search.
Google parlayed its brand loyalty into email, maps, productivity software, and beyond—always making sure to stay true to its core values and never risking undermining its brand loyalty.
Apple
If ever there were a brand with a cult-like following, it is Apple. For many of its legion devoted fans, you couldn’t pay them to use anything else.
The cult-like nature of Apple’s brand loyalty started from its earliest days. Since its inception, the brand has defined itself in opposition to the norm. Where PCs were boxy and conservative, Apple was sleek and edgy. Where PCs prided themselves on functionality, Apple prided itself on design.
As the creative alternative to stodgy brands like Microsoft, Apple was instinctually appealing to anyone who saw themselves as an outsider. But the brand’s real brilliance has been in flipping the script without sacrificing its brand loyalty.
These days, Apple is the most popular brand in many of the categories it operates in. By staying true to itself, and never sacrificing on form for the sake of function, it’s been able to grow its market share to unfathomable levels, while retaining its edgy, outsider appeal.
The upshot? More than 90% of iPhone owners say they’ll stay loyal to Apple, despite the fact that newer models get more and more expensive—and more affordable alternatives are readily available.
Starbucks
Ask anyone who knows anything about coffee and they’ll tell you: Starbucks’ coffee is far from the best. And yet millions upon millions of brand-loyal customers return to Starbucks, day after day, to wait in long lines, in nearly every country around the word. Why?
Because Starbucks sells more than just coffee, of course. At one point, the company called it the “third space” between home and work, where their customers knew they would always find a welcoming, relaxing place to hang out.
These days, Starbucks’ brand loyalty goes beyond its “third space” culture. Like other multinational food and beverage brands, the thing that keeps Starbucks’ customers coming back, again and again, is that it promises an unfailingly familiar experience.
Remember, the more familiar an experience is, the more we trust it. And the more we trust it, the more loyal we are likely to be. From Seattle to Singapore, the Starbucks brand experience is nothing if not consistent. That is the secret to its industry-leading brand loyalty.
The Takeaway
Whether you sell computers, coffee, or consulting services, few things are more critical to the success of your business than brand loyalty.
Cultivating a die-hard fanbase that doesn’t just prefer your brand, but insists upon it, is one of the best ways to foster sustainable business growth.
Building true brand affinity among those you serve doesn’t happen overnight. It takes research, strategy, engagement, and a healthy dose of patience. But it’s well worth the effort.
Need proof? Just Google your local Starbucks on that iPhone in your pocket to see why.
Brian Lischer
A prolific blogger, speaker, and columnist, Brian has two decades of experience in design and branding. He’s written for publications including Forbes, Entrepreneur, Inc. Magazine, Fast Company, HuffPost, and Brand Quarterly.
