When we think of traditional customer loyalty, we think of the points-for-purchase rewards model. We think to ourselves “How many points do I need to can earn this item?” Many brands limit themselves to rational or transactional loyalty as opposed to emotional loyalty. Purchasers make decisions based on logical decision-making and economic incentives like rewards points, sales, and discounting. Customers calculate the value of the brand based on the extras it offers.
Though transactional loyalty is proven to be a very effective way of creating loyalty, brands must also create a sense of emotional loyalty with the customer. Because when we think of the term “loyalty” in itself, it’s more of an emotion rather than a transaction.
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Why Emotional Loyalty Matters
Building a base of customers with emotional loyalty should be a primary goal for most businesses. Emotional loyalty entails a deeper level of commitment to the brand because the emotional tie goes beyond economic incentives.
Too much emphasis on rational transactions and you’re less likely to create a genuine connection with your customers. The rational consumer will only stay as long as you provide that certain value. But an emotional customer is more likely to stick with you. According to Forrester Research, emotion is the #1 driver of loyalty.
“Strategies that rely purely on loyalty programs to offer points and discounts miss an opportunity to drive deeper engagement through emotional loyalty,” states Emily Collins, Analyst for Forrester Research.
Types of Customer Loyalty:
- Rational Loyalty- Loyalty based on transactions. Consumers are attracted to quantitative metrics like points and incentives.
- Behavioral Loyalty- Customer continues to purchase same products based on purchasing behavior and convenience instead of preference, sale, or emotional ties.
- Emotional Loyalty- Consumers buy not based on incentives, but rather things like customer service, storytelling, trust, and philanthropy.
Brand Examples of Emotional Loyalty:
Since the beginning, TOMS Shoes built a brand and business model on the foundation of giving. For every pair of shoes purchased from TOMS, a pair is donated to a child in need. Though they may not be the cheapest pair of shoes, consumers are committed to spending the additional money on TOMS because of what it gives back.
According to Gallup, when customers build emotional ties with brands like these, they’re 32% more likely to visit their store and will spend on average 46% more money.
The Dove Self Esteem Project
Dove is one of the most recognizable beauty brands in the world. Instead of saying which Dove product will make women beautiful, they instead build their campaign around the idea they already are beautiful. Dove wanted to rid women of the anxiety and insecurities they face every day, so their campaign aimed at how beautiful women can be no matter their size, color, or shape.
This campaign has established increased trust between Dove and women everywhere. The brand makes women feel good about themselves which in turn, makes women feel good about the brand.
Over the last century, Coca Cola has done a great job of consistently reinforcing positive emotions through its advertising. Whether it’s Santa Claus, a polar bear, or an individual person, they’re always drinking a Coke and they’re always happy.
With the great Coke vs. Pepsi debate, Pepsi’s messaging is always telling us about how much better Pepsi is when comparing to Coke. Coke, on the other hand, rarely makes mention of its competition. Pepsi is trying to convey its messaging to the rational/behavioral customer, while Coca Cola’s ads evoke positivity with “Taste the Feeling” or “Open Happiness.” And it is for that reason that Coke will always win in the great soda debate.
“Typically, loyalty is viewed by organizations as customer purchases and repeat visits. This is looking at it solely from a rational perspective. Many organizations do not consider that loyalty is an emotional attachment. The reason customers return is not just a rational perspective but an emotional perspective.” -Colin Shaw, author and customer experience expert
Value of Emotional Customers
A study by CapGemini showed that customers with high emotional engagement are more likely to have strong brand affinity compared to someone with low emotional engagement.
In fact, highly emotional people buy their favorite brand 82% of the time when they need a specific item compared to 38% for less emotional people. Those with less emotional engagement fall more under the rational and behavioral models, making decisions based on logic and routine over emotion.
However, more emotionally-engaged shoppers also expect more from the retailers. By 2020, 51% of emotionally-engaged consumers expect retailers to anticipate their needs and make more relevant product suggestions.
But with great service comes great reward. Emotionally engaged customers are also more likely to refer customers to their friends and review products. Taking care of emotionally engaging customers is especially important from a brand’s perspective.
How Companies Can Build Emotional Loyalty
How companies engage emotionally always goes back to their core messaging. What does the company care most about? How can you as a brand earn consumers’ trust and keep them engaged? A huge component is interaction. Whether it’s through an in-store associate, email support, phone, or even social media, a customer wants to be recognized and felt appreciated.
Continuing to keep and earn trust through excellent customer service is a huge component as well. Company philanthropy also plays a role; customers are often willing to pay a little more if it means their money going to a good cause. Those are just a few of many great ways to help build emotional loyalty.
Other Emotional Loyalty Strategies:
- Differentiating shopping experiences
- Associating specific emotion with brand interactions (Coca-Cola)
- Surprise & Delight
- Give relevant product suggestions
When it comes to building emotional loyalty, it all goes back to doing good business. Provide great customer experience and meet shoppers’ needs. Transactional rewards provide useful incentives to customers, but we find that customers with more emotional ties are actually those most loyal.
It’s important to create balance between retention strategies and building emotional loyalty through your brand’s messaging and service. By building that trust, you’re more likely to create a true bond with your customers. If you have any questions on ways to create more emotional ties in your brand’s messaging, contact us for a consultation and we’ll help you every step of the way!