Research repeatedly finds that a typical business has a 5–20% chance of winning over a new customer, while the chance of keeping an existing customer coming back to the same goods or services runs as high as 60–70%. Which has convinced owners everywhere that holding on to existing customers is one of the biggest opportunities there is to grow revenue and profit. And that, of course, comes from a business building a strategy of brand loyalty. So let us look at what brand loyalty actually is, and what matters most in building it successfully.
What is brand loyalty?
Brand loyalty is the good feeling, the favourable impression, a customer holds towards a brand, which leads them to keep choosing that brand's goods or services. It comes from the quality of the products or the service meeting what the customer wanted and leaving them satisfied. Building brand loyalty is one of the components of brand equity, which makes a brand known, gives it value and brings customers back.
What kinds of brand loyalty are there?
- Emotional loyalty: loyalty that forms in the customer's mind through attitude, belief or desire, and through the good feeling they have about the brand, or a good experience of it in some form.
- Rational loyalty: loyalty that forms through behaviour — the customer has tried the product or received good service, and comes to accept the brand more readily as a result.
What does building brand loyalty actually get you?
- Repeat purchases
If your business builds brand loyalty successfully, customers are impressed and there is a strong chance they will come back and buy from that brand again and again. They grow fond of the brand, fond of what it stands for or of the product itself, and using it feels like more than good value — it feels like something to be proud of. - Word of mouth
If your products or services are genuinely good, customers will recommend them for you. Word of mouth is the best advertising strategy there is, because it is a recommendation from someone the listener already trusts — and it cuts your advertising costs into the bargain. - Competitive advantage
The more impressed customers are with your brand, the greater your competitive advantage, because you can attract and reach more customers than your rivals — whether by meeting customers' needs with better-quality products, more distinctive service or a stronger marketing strategy. - Becoming the first brand customers think of
Plenty of businesses run into the problem of customers not choosing them whatever they do, or comparing them with other brands and drifting away. Building brand loyalty leaves customers impressed and makes yours the first brand they think of when they want to buy.
Six ways to build brand loyalty that every modern business should know
1. Offer payment with points alongside cash
Did you know that letting customers pay partly with points and partly in cash can lift purchases and point redemptions by as much as 20–25%? It appeals to customers on value — they get something for the points and pay less cash.
2. Segment customers by behaviour
Customer segmentation by buying behaviour or lifestyle — the activities they enjoy, their interests, their opinions — lets you offer the goods and services that most closely match what they want. Surveys find that this way of building brand loyalty can win you 10–20% more new customers, retain 10–15% more over the long term, and lift satisfaction by 20–30%.
3. Use A/B testing to test quality
A/B testing, also known as split testing, means trying new versions of the various elements on your website or social media channels, with new ideas behind them, to find the version that performs best and to measure consumer behaviour more closely.
4. Find the right partner
Partnering with other brands that are the right fit — with a lifestyle and goals pointing the same way as yours — makes your work easier, gives you access to new customers, and opens up the chance to create new products or services that better answer what your core customers want.
5. Build a range of ways to redeem points
Redeeming points need not mean redeeming them against goods alone. You can offer customers a range of more interesting things to redeem against: a discount on their next visit, a special limited-edition reward, or a free item once they reach 1,000 points, for instance. Strategies like these build brand loyalty continuously, because customers feel they have to come back and buy again to reach the total.
6. Keep a POS at the counter: find customer records easily, run varied promotions, understand customers better
Another way to build brand loyalty that matters just as much, and that no business can afford to miss, is keeping a POS at the counter. It lets you store and retrieve the records of your most important customers effectively, so you can analyse that data and understand them better. It also lets you attract customers with well-judged, varied promotions, reduces the risk of mistakes in stock management and in service, and makes life easier for your customers while giving them a better experience.
Looking for a complete counter POS system that answers what your business needs? At Qashier we build complete POS systems for every type of business, helping you manage customer relationships from accurate records, turning the difficult into the straightforward, and lifting profit while impressing the customers who matter most to you.