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16.12.20

Customer loyalty vs brand loyalty – what’s the difference?

 

The top priority for any brand or company should be developing and maintaining the loyalty of their customer base, and this loyalty comes in two forms: brand loyalty and customer loyalty. When properly established, these two types of loyalty are a great help to any business looking to improve their bottom line and boost ROI, and knowing the difference between the two is the first step in generating momentum towards achieving better ROI. After all, studies have shown that 43% of customers spend more at brands they’re loyal to (Fundera).

Brand loyalty

How does your brand speak to consumers? One way to identify brand loyalty is to understand how consumers feel about your brand and how it is perceived. Brand loyalty usually manifests itself in the consumer’s commitment to continuously using the brand, such as repeated purchases or positive promotional behaviours like word of mouth recommendations.

This kind of commitment can be explained by the emotional connection the consumer has to the brand, which usually comes down to how brands engage with consumers in the first place. For instance, many consumers now align themselves with brands that agree with their own personal beliefs, which is why many companies are placing more focus on promoting specific values that boost their brand image of corporate social responsibility.

Ethical principles are beginning to make up a large part of the reasoning behind the purchasing decisions of many consumers, which is why many brands are utilising CSR as a means of boosting brand loyalty and customer engagement – ethical packaging is a good example of this. 56% of customers stay loyal to brands who “get them”, and 89% of customers stay loyal to brands who share their values (Fundera), further illustrating the importance of customer engagement for boosting brand loyalty.

Customer loyalty

Loyalty has everything to do with ensuring that customers return to your business. Acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one (HBR), and as a business, it is vital to make sure your customers feel like they are a part of your community.

A good place to start is to reward loyalty. Providing your customers with personalised promotional offers and customised perks will encourage repeat purchases. Research shows that  customers using a loyalty program spend between 12-18% more per year than non-loyalty programme members (Fundera). Personalisation is key here, as customer loyalty has more to do with how they feel treated rather than how they perceive the brand. Personalising your promotional offers to their individual buying habits will undoubtedly make your customers feel more valued, which will in turn further cement their loyalty to you as a company.

Another factor to consider when running promotional marketing campaigns is reward redemption. Everybody loves a reward or an offer, but the long-term success of any rewards program is highly dependent on how easy the reward is to redeem. Ultimately, a loyalty programme is a powerful retention tool, and 68% of consumers say that receiving a reward would increase their loyalty to a brand (see our whitepaper). Having said that, 51% of consumers say that promotions that are easy to redeem are the most important factor (Granby).

What does this mean for your brand?

Building customer loyalty and brand loyalty right are intrinsically dependent on how well you know your customer. You must know your customer well in order to keep them loyal to your brand and company ethos. Personalising your service or promotional offers to them will help you retain them as customers. Having said that, promotions are nothing without audience insight.

Brands must ensure that they are aware of the potential for loyalty in their target demographics, tailoring and prioritising activity accordingly.

Example of promotional marketing for loyalty: know your customer

For example, did you know that 35% of consumers would redeem a reward via mobile device or tablet (see our whitepaper)?

Digging a little deeper though, we discover this method of redemption is most popular with those aged 16 – 34 (50%), and is far less popular with those aged 55 and over, with only 11% of people in this age group picking it as their preferred way to redeem prizes and offers (see our whitepaper).

This goes to show the importance of knowing your customer and how to engage with them on an individual level – casting a wide net and hoping for the best simply won’t yield much of a result nowadays.

Get in touch if you’re keen to explore new ways to personalise your promotional marketing campaigns to support and build customer loyalty into all espects of your fulfilment project.

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