How to Really Create Brand Loyalty: Let’s Break it Down

Posted by Matt Bowen

Mar 3, 2015 12:13:00 PM

Editor's Note:  This blog was originally posted in February 2014 and has been updated.

Could there be a shinier brass ring than brand loyalty? Whether B2B or B2C, having a customer base that enthusiastically and consistently chooses your brand over other options is what separates star companies from the rest. 

Yet, when was the last time you saw “brand loyalty” on a list of corporate goals?

Increased revenues: of course
Increased profit margins: always
Increased market share: without a doubt 

Increased brand loyalty? Crickets

BrandLoyalty

While most marketing folks will certainly claim brand loyalty is of utmost importance, turning that into tangible action is a different story.

Of course, some industries have long ago figured out that brand loyalty is critical. On the consumer front, loyalty cards, points, frequent flyer miles, etc., are all intended to create loyalty.

But do they?

To understand loyalty, it’s important to first break it down to what it actually means. Brand loyalty is typically equated to customer satisfaction, but in reality, while certainly related, these are two different measures. True brand loyalty transcends satisfaction and motivates customers to want to, or at least be open to, promoting your brand for you. They tell friends and colleagues. They talk about it on social media. They will defend your brand if someone questions it. Customer satisfaction, on the other hand, is driven by consistently delivering what your product says it is supposed to do, otherwise known as its functional benefits.

Basic principal: Brand loyalty is not driven by delivering the functional benefits of your product or service.

Even if you do a cracker-jack job of consistently delivering these benefits, it will not drive loyalty. Why? Because loyalty requires more than just doing what your customers already expect your products and services to do. Your competitors can likely do that very well too.

Before you can even get to brand loyalty, an important precursor needs to take place: customer commitment. Studies show that customer commitment comes in two forms: economic commitment and affective commitment. Economic commitment is when a customer keeps buying a certain product or service because there simply aren’t other good options, or the cost of switching is too high. Not naming any names, but those binding contracts that mobile phone operators require come to mind.

Economic commitment is false loyalty. Many of these customers would likely bolt in a heartbeat if they could.

Affective commitment, however, is a whole different ballgame. This type of commitment is based on an emotional connection. Customers with an affective commitment stick with certain brands because they are emotionally connected to it. They seek out and choose to buy your brand, over and over.

There’s a key psychological component at play here. What we are really talking about in brand loyalty is actually memory. When we have an exceptional brand experience it gets lodged into our memory. This in turn gets translated into an emotional connection that all positive memories create.

The functional benefits of your product or service, while important, just don’t cut it when it comes to creating emotional connections. We don’t record functional benefits into memory, and therefore don’t make an emotional connection.

Let’s be clear: true brand loyalty is a result of first creating affective commitment.

So how do you do this? For starters, transition a good portion of your focus from communicating functional and technical benefits to creating exceptional experiences for your customers. I believe that at least 20% of your efforts (and budget) should be allocated here.

Unless you’re in hospitality, chances are focusing your efforts on creating over and above customer experiences could be revolutionary in your industry. It’s an exceptional way to differentiate your brand.

A couple pointers to get you started:

  1. If you aren’t delivering the basics consistently (i.e. the functional benefits of your products or services), you have to start there. You need to do that just to avoid dissatisfaction, and you can’t build affective commitment if don’t meet the basic requirements that your customer base expects.
  2. At the core of affective commitment is creating over and above experiences that create emotional responses that in turn get recorded into memory. What this means to your brand depends on the relationship you have with your customers, but the baseline is true regardless: what can you do for your customers that will go beyond their expectations? How can you surprise them? How can you anticipate their needs even before they do? How can you personalize their experience? How can you make them smile?

And here’s the kicker: creating affective commitment is NOT about offering deals and discounts. That might create economic commitment, but that’s short lived and will not lead to loyalty.

I propose that creating affective commitment and consequently brand loyalty should be a top focus of most every marketing department. Even better, it should rise above that and be a top corporate objective. New revenue is critical, of course, but creating true loyalty –– and then turning that conviction into a marketing channel in its own right –– is what makes some brands so cleverly successful.

Let’s hear it from from you: what experiences have you had, both professionally and personally, that have effectively created brand loyalty, and why?

–Matt

Topics: Brand Strategy, Marketing Execution, B2B