Why Is Everyone Talking About Emotional Loyalty?

by Natasha Ambavle |

Why Is Everyone Talking About Emotional Loyalty?

It’s a known fact that iPhone users are the true embodiment of loyal customers. Despite the never-ending marketing war between Android and iPhone users, Apple has been on a winning acquisition streak with a quantifiable number of Android users migrating to Apple. TechRadar estimates 1.5 billion Android users could switch to iPhone in 2022.

So, what’s the prime reason behind Apple’s incredible acquisition rate? Surprisingly the answer is not a better UI, features, or upgrades. It’s Apple’s loyal base of existing customers. According to MBLM’s Brand Intimacy COVID Study of 2020, Apple was ranked number one in a listing of the most intimate brands during the coronavirus pandemic. Apple’s USP is its loyal customer who the brand nurtures and fosters through emotional loyalty.

The ongoing pandemic has greatly altered the dynamics between a brand and its customers. While customer experience emerged as an important purchase-determining factor, superseding price and quality, emotional loyalty reigns supreme when it comes to retaining customers and forming a strong customer-brand relationship. To understand what exactly emotional loyalty is, why it works, and how you can benefit from it, you first need to understand emotional loyalty in contrast with other types of loyalty.

The Three Types of Loyalty

  • Behavioral Loyalty—This type of loyalty is centered around convenience. Customers simply purchase from the brand out of habit. They may have no special preference but remain customers simply because they’re habituated and purchasing from the same brand repeatedly becomes a ‘no-brainer’ activity.
  • Rational Loyalty—The important principles behind rational loyalty are quantifiable metrics like price, quality, perks, and incentives. Customers choose to remain associated with the brand because it’s beneficial for them. So long as it benefits the customer, they’ll repurchase from the brand.
  • Emotional Loyalty—Emotional loyalty is based on trust and emotions. Various emotions like nostalgia, shared values and goals, trust, and a mutually beneficial relationship can help build emotional loyalty.

Emotional loyalty may seem hard to attain when compared to behavioral and rational loyalty but, the truth is, only emotional loyalty is bankable. Behavioral and rational loyalty are temporary and unpredictable. You never know when a new competitor will emerge and how efficient its supply-chain management will be to make its products more affordable and convenient to customers. Emotional loyalty stands the test of time and is undeterred by new entrants in the market and minor price fluctuations. Emotionally loyal customers are easier to retain and more forgiving. They value an emotional, long-term association over price, so their loyalty remains steadfast even in unprecedented circumstances.

Emotions Drive Sales

A Gallup report states, “Customers form strong emotions about your company based on their experiences with your people––and those emotions strongly influence their buying decisions.” Emotional loyalty has a direct and considerable impact on various business and marketing aspects that drive sales and revenue, including:

  • Customer Retention:  82% of companies agree that retention is more cost-effective and way more profitable than acquisition. Most companies struggle with retention because they’re unable to create an emotional connection with their audience. Emotionally loyal customers consciously remain associated with the brand because their association is not based on factors like price and packaging. Their connection with the brand is based on emotional factors that govern their purchase decisions.
  • Customer Lifetime Value: Customer lifetime value (CLV) is the gross profit attributed to a customer throughout their journey with the brand. Emotional loyalty not only increases customer retention rate but has a tremendous impact on the CLV. It’s easier to sell various other products that fall under the brand’s umbrella to emotionally loyal customers. According to current stats, emotional loyalty is what motivates customers to spend approximately 67% more on the brand than they originally intended to.
  • Brand Promotion: Emotionally loyal customers are strong brand advocates. They positively influence their network of friends and family, helping to build a strong brand image. Their conviction strongly influences others as they organically promote the brand through word-of-mouth marketing.
  • Acquisition Rate:  Chip Bell, Founder of Chip Bell Group, said in an interview, “Loyal customers, they don’t just come back, they don’t simply recommend you, they insist their friends do business with you.” Organic brand promotions have a direct impact on customer acquisition rates. Loyal customers not only spread awareness about your brand but also help in bringing in new customers.

Loyalty Is a Two-way Street

If you expect loyalty from your customers, you first must extend the same courtesy to them. Fred Reichheld’s recent work ‘Winning on Purpose’ focuses on the concept of Customer Capitalism. The central ideology of this concept is to ‘love your customers’. When you focus on improving customer satisfaction and enriching the lives of your customers, you create a strong base of emotionally loyal customers. By focusing on the five pillars of emotional engagement—affinity, attachment, recognition, and lasting impression, you can strengthen the bond between your brand and your customers.

Since the pandemic, customers have begun to expect more than just good quality products from brands. Now, more than ever, customers want to feel appreciated for the time, resources, and money they choose to invest in your brand and not others. Introducing loyalty strategies is perhaps one of the easiest ways to show your customers some love. The 2021 Loyalty Barometer Report reveals 81% of customers want a relationship with a brand. Within this relationship, consumers want to feel appreciated for their loyalty and purchases, and they want to be recognized consistently across purchasing and communication channels. Rewarding certain CTAs reinforces behavior, keeps customers engaged, and improves retention. Learning about their purchase patterns and shopping behavior, and delivering personalized service, also helps boost loyalty.

Make Data Your Holy Grail

So, how do you make your customer love you? How do you build a relationship with them? Well, just like in any other interpersonal relationship, you start by getting to know them through first-party data. Understanding and analyzing customer behavior through data helps you design strategies that appeal to your target groups. Data can help you create a strong ongoing and meaningful relationship with your audience.

Loyalty programs help you with both building a strong customer-brand relationship and accumulating vital zero and first-party data . It’s an extremely effective way to engage, retain, and create a continual connection with your audience while giving you access to important customer data. By creating a mutually beneficial value exchange through a loyalty strategy, you create an ongoing dialog with your customers, build a value-based relationship, and continually collect data to create personalized and meaningful experiences that foster emotional loyalty.

Annex Cloud’s Loyalty Experience Platform and proven success process are purposefully built to help you become on of your customers most beloved brands. Contact us today to see how you can start creating an emotionally loyal customer base.

Harnessing emotional loyalty is one of our ten trends and predictions for 2022. Read about all 10.

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