These days, people have nearly endless purchasing options. Brand loyalty is when consumers forgo purchasing from competitors, favoring your brand above all others. They don’t need to be re-convinced or heavily marketed because they keep coming back when they need more of what you have to offer. David Kauzlaric, cofounder of Agency Elevation, is passionate about cultivating genuine loyalty with his clients. When asked if he could condense his mission statement on a bumper sticker, Kauzlaric replies without hesitation: “Loyalty Above All Else.”
Building brand loyalty with clients begins with understanding that, just as in personal relationships, there are multiple types of loyalty. The lowest level is what David Kauzlaric describes as mercenary loyalty. In this case, the customer is essentially brand agnostic. Their only loyalty is monetary. They’re making their purchasing decision because what you offer is the cheapest. Mercenary loyalty can work, but has an intractable problem. It can easily be disrupted by a competitor with a bigger discount.
Another kind of brand loyalty is based on consumer inertia. The client feels stuck in therelationship. They are actively eyeing the advantages of a competitor’s product, but realize there will be a steep learning curve to switch brands, or difficulty synchronizing a new brand into their current system. Many competitors, like Apple and Android, rely heavily on brand inertia. Consumer inertia is an effective strategy, but only works until a competitor, influencer or friend convinces someone that an alternate experience is worth disrupting their inertia.
A third type is tribe loyalty. The rise in the popularity of this approach likely makes it the most common method businesses use to retain long-term customers. David Kauzlaric agrees that each consumer has certain values and they look for brands that mirror those values back to them. They become attached to those brands and are willing to pay more because it confirms their beliefs. In the best of circumstances, clients become outwardly enthusiastic fans and ambassadors. They will attach car decals or wear apparel that advertise the brand, signaling to others they are part of its tribe. While this approach to brand loyalty can be extremely powerful, it does have one drawback. If you violate or change your current values, you lose your tribe.
A fourth category is what’s known as experiential loyalty. This method applies the psychology of gaming to shift brand loyalty from the product or service itself to encompass the entire customer experience. When you think about game dynamics, what are the elements that make it such an immersive, addictive experience? Awards, points, progress, mastery, competition, surprise, and social connection easily come to mind. “Thanks to technology and AI, if you begin to see gaming as a metaphor for business, there are tons of creative opportunities to enhance brand loyalty,” explains David Kauzlaric. Membership rewards, product discounts, surprise give- aways, free shipping, for example, can all be gamified to motivate and engage customers. When brands deliver a relevant and memorable gamification experience that creates customer connection, they build lasting allegiance and devotion.
There are multiple types of loyalty and varied strategies for nurturing them. Different approaches for building brand loyalty may be deployed individually or layered in combination. In a perfect world, 100% of your customers are faithful to your products or services. Until then, it’s up to businesses to incentivize client retention to add value to their brands.