What Is Brand Loyalty?

What Is Brand Loyalty?
Written by Michelle Clardie

What is brand loyalty? Brand loyalty is the act of repeatedly purchasing goods and services from the same provider. Companies can cultivate brand loyalty by giving customers a reason to return time after time.

Do you regularly visit the same coffee shop? Or order from the same pizza parlor multiple times each month? You might get your groceries from the same grocery store each week, gas from the same gas station, and clothing from your favorite retailer. With each purchase from your regular spots, you’re practicing brand loyalty.

As creatures of habit, most people tend to choose their favorite provider of a given good or service, then stick with it. Companies can capitalize on this behavior by becoming the go-to provider in their market niche.

According to the Harvard Business Review, gaining a new customer costs somewhere between five and 25 times as much as keeping an existing customer (depending on your industry). So it pays to keep your customers happy and keep them coming back for more.

Cultivating brand loyalty is all about giving your customers a reason to return to your business instead of sampling your competitors.

Benefits of brand loyalty

  • Solid cash flow as customers regularly make purchases
  • High customer satisfaction as customers buy into your brand as “theirs” (their coffee shop, their gym, their salon, etc.)
  • Increased word-of-mouth marketing as happy customers tell their friends
  • Lower cost of client turnover
  • Opportunity to upsell existing clients
  • Loyal customers will pay higher prices to stay with their preferred provider

Ways to cultivate brand loyalty:

  • Produce exceptional products, deserving of your customers’ loyalty
  • Provide stellar service so your customers feel good about every interaction
  • Publish useful content that gains likes and shares from your customers and followers
  • Incentivize your customers to return through a rewards program
  • Make it easy for your customers to order from your business

Examples of brand loyalty

1. Rewards credit cards

Retailers have been offering their own store credit cards to build brand loyalty for decades. Why go somewhere else when you can save 5 percent on purchases by using your Target RedCard?

Other examples of retailers offering rewards credit cards include:

  • The Gap
  • Best Buy
  • Home Depot
  • Macy’s

2. Punch cards

Buy nine smoothies, and get the tenth smoothie for free! Punch cards are often used for food and drink items that are consumed regularly, like smoothies, coffees, subs, pizzas, frozen yogurt, and even cupcakes.

You might also use punch cards to gain brand loyalty in beauty and wellness. Massages, facials, hair cuts, and manicures would all be good candidates for punch cards.

Punch cards could be the old-school physical punch cards or digital punch cards that use an app.

3. Reward points

Grocery stores, gas stations, and credit cards often give their customers reward points as a thank-you for their brand loyalty. The more money customers spend, the more points they earn. And they can redeem points for things like travel, shopping, or cashback.

4. Subscription plans

Subscription plans are the trendiest way to promote brand loyalty in the 2020s. With a subscription model, your customers pay a monthly or yearly fee to access your good or service. This garners loyalty because your customers don’t need to think about which provider they will use for the coming week; they’re already committed to you.

Examples of subscription plans include:

  • Blue Apron (meal kit delivery)
  • Beachbody (fitness app)
  • Stitch Fix (clothing)
  • Birchbox (beauty products)
  • Adobe (software)

5. Friendly, familiar service

Treating customers as though they belong when they visit your location(s), social profiles, and website creates a strong sense of brand loyalty.

When Starbucks started charging far more than their competitors for comparable coffee, it was the exceptional service that kept customers coming back day after day. Starbucks baristas are known for remembering people’s names and making long-standing connections with their customers.

What is brand loyalty? Brand loyalty is when you convert “sometimes” customers into regular customers. Read on for ideas on how to cultivate loyalty to your brand. Click To Tweet

About the author

Michelle Clardie

Michelle Clardie is a real estate and finance expert with over 15 years’ experience covering everything from luxury property management to property tax consulting. She has an MBA in Management and Strategy, and her work has been featured on sites like Yahoo! News and Inman.

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