Loyalty, as defined by marketers, consists of a customer’s tendency to favor one particular brand or product over all others. Loyalty to a company would include the tendency to try a new product type from that company first, based on previously experienced satisfaction from other product(s) of the company. A customer’s loyalty is typically derived from a combination of consistency, performance, convenience, familiarity and satisfaction. Ideally brand loyalty also consists of a feeling, one that can be evoked and reinforced with brand images, logos and associations. Trust and loyalty go hand in hand, and it takes a strong bond and history with a customer to maintain loyalty through breeches in trust.
Customer loyalty must be continually fed for it to be maintained, yet first has to be established through a multi-tiered process. The process begins by identifying the specific target customer and what exactly the company is promising to deliver by purchasing its product or walking through the door. Whether it be taste, quality or performance, the company must also attach an emotion to the purchase which translates to fulfillment and satisfaction. While a product may ultimately mean different things to different people, the experience should be consistent in subsequent purchases to establish loyalty.
Customer loyalty to a store or service provider, as opposed to a consumer goods company or product are different animals, yet necessitate several of the same promises between company and customer to be established and delivered. This all begins with the self-ascribed brand identity and market differentiation. Marketplace clutter and globalization make it increasingly important for any brand, vendor, store or product, to clearly define and constantly reinforce what they are, what they provide, what makes them unique and who their target customer is. The ensuing shopping experience promised needs to be consistently provided to cultivate loyalty. Whatever that promise is, whether it be the lowest price, the crispest crust, the fastest service or the biggest selection of organic food, it needs to be clearly communicated and consistently delivered.
It is unusual for any customer to be exclusively loyal to one brand, due to practical considerations such as lifestyle and convenience. Consumers tend to spread their loyalty, with ease and accessibility influencing preference, generally among stores or brands that are similar in quality and concept. Discount retailers are a good example, with the options such as Target, Walmart and K-Mart as some of the big names competing for the same customers, offering similar goods and services. Assuming a customer prefers Target but only shops there 70% of the time due to convenience, the goal of the preferred retailer is to continually reinforce the positive shopping experience that breeds the loyalty in order to maintain and steadily increase its share. Quite simply, consistently delivering on its promise will justify an additional 10 minutes of driving.
In the increasingly competitive world of retail and consumer goods, it is not enough to have an established brand name when newer names promising the same or better keep arriving. It is critical for the preferred brand to regularly remind their customers of the reasons they have remained loyal. Brands need to be fresh and current, yet comfortably familiar. Names like Johnson & Johnson and Coca Cola have effectively drawn on nostalgia and tradition while successfully keeping up with newer trends in packaging, product offerings and lifestyle preferences.
A rapidly changing marketplace necessitates branding refreshes to grow the consumer base and maintain a competitive edge by keeping up with these changes. Such transitions are more seamless with a strong base of loyal customers; their buying tendency will not change as long as the goods are still delivered. That trust can also carry companies through temporary breeches, as in the case with the tainted Tylenol in 1982. Johnson & Johnson had enjoyed a 35% market share of pain relievers, which plummeted to 8% within weeks of the tragic case. Swift action by the executives in the forms of recalls and improved safety measures restored Johnson & Johnson dominant market position within a year, drawing upon that pre-established trust with its consumer base.
The case with Johnson & Johnson is a model in how to be accountable and take the appropriate measures to follow through in a crisis, delivering on their promise to consumers. However, follow through and engagement with the customer is equally important in good times as bad; consumers need to be reminded of their brand preference and loyalty. More voices in the market clamoring for attention can easily drown out loyalty without those reminders. Nearly all retailers today, large or small, offer customer loyalty incentives and programs to encourage repeated patronage. It is important to stay ahead of the trend, reinventing ways to connect with the buyer, offering newer and more unique rewards for their loyalty.
The big get bigger in today’s marketplace; traditional discount retailers are offering more and more services and products to choke out the smaller specialized businesses, while traditional food processing companies also compete in the beverage market. There is always a place and need for specialized and unique services and businesses, but in order to succeed, there needs to be a clear established product or service and target customer, effectively communicated by the branding. Brand loyalty is a challenge to maintain and even more difficult to establish anew, yet it is the currency that will determine the success of the business.