Deconstructing the Concept of Product Loyalty
People have a tendency to form preferences and associate themselves with people and things they either have similarities with or things that resonate with their values and aspirations. This is all part of the social construct which is reflected even in theories such as In-group favoritism and Maslow’s Hierarchy of Needs. This sociological factor also has a massive impact on marketing which is backed by ample research on consumer psychology and its effect on brand and product loyalty.
“Consumers have an innate drive to define and express themselves through the purchases they make,” according to a study on brand loyalty by the University of Pretoria, SA. Products that not only satisfy or meet requirements but also resonate with the customer’s values and personality become popular among the consumers instilling the most important factors – trust and loyalty.
So why are trust and loyalty, such important and influential factors that they determine the fate of a brand? Let’s explore!
What is Product Loyalty?
Brand or product loyalty could be defined as the affinity a customer develops towards a particular brand or product. It is the gradual amalgamation of positive association, fondness, deep-rooted loyalty a customer has towards the brand. This loyalty could also be deemed as a commitment, mutual trust and appreciation between a brand and its loyal customers.
Loyalty is a subjective term and not all customers exude the same amount and type of loyalty towards a product. For some, loyalty could be the result of long-term association and for some, it might be based on aspirational quality while for others it could be because of nostalgia.
Factors that Influence Loyalty
- Brand Reputation – Brands that achieve cult status over the years tend to build a strong base of loyal followers. These followers are not necessarily customers but they revere the brand and are strong advocates of the brand as well. For example, brands like Rolls Royce, Ferrari, Rolex Watches have a strong brand following that influences product loyalty.
- Brand and Product Reliability – Reliability plays an important factor in influencing trust and loyalty. Customers may find it hard to trust, let alone be loyal to a brand that is in and out of the market or one that has a reputation of constantly changing its product’s name and packaging. Reliability is perhaps the first step of numerous brand-building activities.
- Product Quality – There is a reason why everyone stresses on quality even your marketing machine! In the long run, your product quality will determine your brand value and market standing. Substandard product quality cannot guarantee repeat purchasers and building loyalty through low-grade products is an impossible task.
- Customer Experience – Customer experience itself is a culmination of various factors like promotions, communication strategy, brand value, product quality, customer support, and post-sales service. In this day and age, when every other brand is offering the best possible experience, the customers are in no mood to settle for less! If your brand consistently lags in a particular department, say customer support, for example, it will eventually reflect in your online reviews and hamper loyalty among retained customers as well.
Why Does It Matter and How Is It Important For Business Growth?
- Helps in Customer Retention – According to HubSpot, “93% of the customers are loyal to a particular brand and stick to purchasing from it over its competitors.” The direct impact of product loyalty can be seen on the customer retention rate. Retained customers are those that repeat their purchase behavior and continue their association with the brand. Retained customers help with sales, organic brand promotion and also assist in building a positive brand reputation in the market.
- Assists with Customer Acquisition– Customer Acquisition is the process of acquiring new customers and loyal customers can greatly help with them. As mentioned earlier, retained customers build a positive brand image and indulge in word-of-mouth marketing (WOMM) which happens to be one of the most powerful forms of advertising.
- Improved Customer Engagement– Brands that successfully engage customers, witness a 63% lower customer churn. They also experience a 55% rise in revenue. Customer engagement is one of the most important brand-building activities which can be influenced by factors like loyalty. A loyal customer is more likely to engage with the brand on various mediums thereby giving the brand traction and publicity.
Tips to Generate Loyalty Towards Your Product
- Get to Know your Audience – To have a strong brand following and a string of loyal customers, you must first start with the basics – understanding and analyzing your audience. Simple techniques like the Net Promoter Score can give you insights on customer satisfaction levels and their purchase habits. It can even give you an idea of how your brand and product are perceived in the market. This data can improve engagement activities, product, and service quality.
- Work on Creating a Bond with Your Customers – Any real relationship takes time and effort to materialize into something qualifiable, and a customer-brand relationship is no different. Consistent engagement and communication with your audience will help in building a friendship and eventually will help in building trust and product loyalty.
- Shift Focus from Revenue to Customers – There is a reason why customers are often equated with royalty, ever heard the phrase – Customer is King? Happy customers can take your company from a startup to a multinational company. Prioritize your customer by focusing on customer experience and satisfaction which help in building brand loyalty in the long run.
- Incentivize or Reward Your Customers – Loyalty programs greatly help with instilling loyalty among customers. Rewarding or incentivizing customers ensures prolonged customer engagement and association. Customers enrolled in a loyalty or rewards program tend to remain associated with the brand for incentives and eventually begin to rely on and trust the brand. To learn how you could instill loyalty among your customers through loyalty programs, connect with the experienced team of Annex Cloud.