While research shows that most customers want and even expect brand loyalty, the relationship between consumer loyalty programs and customer retention remains particularly difficult to quantify. Meanwhile, brands and stores are both dependent on consumer needs, as retailers rely on brands to attract customers, while brands rely on retailers to market and sell their products. The average consumer’s trust in a brand, however, is changing: over nearly half of the consumers find brands less truthful today than twenty years ago.
Current trends indicate that consumers are slightly more loyal to retailers than brands, with 84% reporting loyalty to a retailer and 82% reporting loyalty to a brand. The difference is relatively small but does certainly demonstrate the need for brands to work harder in order to appeal to customers. Ultimately, retailers and brand manufacturers alike can benefit from consumer retention strategies that strengthen brand loyalty.
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Identification of Loyal Customers
In the past, large-scale manufacturers, especially those who manufacture consumer packaged goods (CPG), have always found it difficult to properly identify their loyal customers due to multiple layers of vendors, retailers, and distribution. Modern technology, however, makes it easier for manufacturers to track their product ratings. For instance, the use of hashtags on social media has made it easier than ever to track consumer use and satisfaction when it comes to their product. Another way of tracking loyal consumers is through email lists and discounts. With plenty of options and relative ease in tracking loyalty, manufacturers, even those who produce consumer packaged goods, can now focus their retention strategies on the consumers who will be the most receptive.
Once loyal customers are identified, manufacturers can encourage them to become advocates. Your consumer advocates are one of your most valuable resources. Your advocates have a much better chance of reaching and being trusted by your customers than traditional advertising. Consumers report trusting their peers over traditional advertising, and 42% of US consumers reported being loyal to brands that their friends or family do business with, while 23% of Americans report being loyal to brands that partner with social media influencers.
Walmart was very successful in activating advocates with their Walmart Moms blog, where twenty Walmart-loyal moms shared posts about day-to-day things that concern housewives and women in general. Manufacturers can also partake in similar strategies by encouraging loyal customers to be vocal about their brand either via blogs or on social media.
User Generated Content
Because of the high amount of trust and influence that is allocated to the average consumer, user generated content (UGC) is also an extremely powerful tool for manufacturers. For instance, consumers are four times more likely to click on UGC-based ads, and 93% of consumers have also reported finding UGC helpful when making a decision to purchase. Also, UGC is much more likely to be shared across social media. This is perhaps because the public sees this as sharing a friend’s post, and therefore worthier than promoting a big-name brand.
Most consumers that create UGC content are also very open to suggestions from manufacturers, with over 50% reporting that they want a brand to tell them what type of content to create and share. This means that, hypothetically, manufacturers could be influencing UGC content if they choose to take advantage of the opportunity.
Creating a Connection with Your Customers
While manufacturers primarily interact with retailers, they should be seeking an emotional connection with their customers. As many as 82% of consumers who experienced high emotional engagement from a brand reported that they will always buy from that brand. Meanwhile, 81% of emotionally engaged customers are likely to recommend a brand to friends or family, and 70% of emotionally engaged customers reported buying twice as much from that brand.
Fortunately, having a strong base of loyal customers can help brands increase emotional engagement. Just as stores have a way to initiate a conversation on social media that actively engages their followers and encourages emotional connections, manufacturers can now think about doing the same. With plenty of social media venues such as Twitter and Facebook, manufacturers can create a sense of community around their products.
Again, manufacturers can rely on their advocates to lead discussions and create a positive atmosphere on social media. However, brands should also be actively working to personalize the consumer experience and understand the needs of their customers. 80% of brand executives reported feeling that they understand the needs of their customers, while only 15% of consumers feel that brand executives understand their needs. Actively looking for feedback and asking for customer input via social media will not only strengthen manufacturer connection with consumers but also help brands better understand consumer needs.
- It is important for manufacturers to utilize modern technology in order to better connect with loyal consumers.
- Loyal customers can become valuable brand advocates.
- Never underestimate the value of UGC.
The emotional connection between manufacturer and customer is not only possible, but it is vital for brand success.