Brand Loyalty – Definition

Cite this article as:"Brand Loyalty – Definition," in The Business Professor, updated September 9, 2019, last accessed October 26, 2020, https://thebusinessprofessor.com/lesson/brand-loyalty-definition/.

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Brand Loyalty Definition

Brand loyalty refers to the consumer’s special attachment to a certain product. This is exhibited by the customer’s repeated purchase of a given product, despite there being other alternatives in the market.

In other words, brand loyalty is where a customer repeatedly purchases a product from only one manufacturer, leaving out other suppliers’ brands. Brand loyalty is of value to businesses because repeated purchases generate higher revenues as well as customer referrals.

A Little More on What is Brand Loyalty

Note that apart from the repetitive purchase of a product from one supplier, loyalty can be demonstrated through other behaviors like word-of-mouth advocacy. This is where you tell others how good a product is and why they should continue using it instead of going for a substitute brand. Brand loyalty also exists where customers are willing to purchase a particular commodity at a higher price, despite there being other alternatives going at a lower price.

Basically, those who are loyal to a certain brand don’t buy a substitute brand even though the preferred brand is not available. Instead, they would rather search for their preferred brand from several stores. In case they don’t find it, they would opt to forego the purchase until the stores are restocked with that particular brand.

Note that the consumer’s decision to purchase is either conscious or unconscious. Nonetheless, it is highly dependent on trust that the brand accomplishes to the consumers. It is the belief and attitude of the consumers that make up a brand. Consumers always expect the brand to fulfill their emotional or physical needs in a way that is unique.

How Brand Loyalty Works [Example]

Businesses with an established brand name, usually operate in a highly competitive market, where there are both old and new rival products. To create and maintain particular brand loyalty, companies usually employ different strategies.

For instance, the marketing department may closely keep track of consumers’ buying trends. They do this so that through customer service, they can be able to establish relationships between them and their customers. Generally, for a brand loyalty campaign to be termed as successful, it needs to address crucial market segment attributes.

Brand Loyalty Example

For instance, Apple has the strongest customer loyalty base following various reasons. Some of the reasons include:

  • An effective brand strategy: The company ensures that as many people as possible have a passion for their products.
  • Customer experience: The company has always ensured that customers have a good customer experience with their products.
  • Continued innovation: They have always innovated in customer tech which has seen its customer ambitions.

In general, the Apple company has been able to experience several benefits from customer brand loyalty. For instance, Apple has experienced an increase in referral rate, retention rate, the share of wallet, and reduction in the marketing costs.

How Important is Brand Loyalty?

There are many benefits of brand loyalty to businesses. Some of the obvious benefits are as explained below:

  • Helps in Building a strong customer base

To succeed in the market, your business must be able to surpass its competitors to ensure that it attains a competitive edge. Brand loyalty is one tool that has continued to help businesses achieve this. When you have a customer brand loyalty, your business will experience the continuous purchase of your brand without considering things like high price or convenience. Customers who are loyal to a particular brand are not easily influenced. The probability of them to continue using a particular product or service will increase.

Also, loyal customers mostly become brand ambassadors for manufacturers. Satisfied consumers will often spread brand awareness by referring new customers. By doing this, they provide the company with free marketing services. Brand loyalty helps the business to withstand a recession. This is because brand loyalists do not stop buying their favorite brand even amidst a recession.

  • It gives businesses a competitive advantage

A company with strong brand loyalty always has a competitive advantage. It is the brand loyal customers who assist a company to go past its competitors, making it succeed in the marketplace.

  • Leads to high sales

Also, brand loyalty helps businesses to increase their number of sales. When customers remain loyal in purchasing a certain commodity for a long time, businesses are able to sell many of those commodities. This is because it ensures long-term business sustainability. Again businesses are able to measure the quantity of their brand’s success through brand loyalty. In other words, it is a quantifiable measure of a business’ success.

Generally, to nurture brand loyalty, you are required to establish a reward program. This will help to entice consumers to continue purchasing a certain product in order to accumulate points. The objective of doing this is to ensure that customers accumulate as many points as possible, which they can redeem later to get prizes or rewards.

How do you Maintain Brand Loyalty?

There are various ways in which a business can maintain brand loyalty. Some of these ways are explained below:

  • Stay on top of trends

To maintain brand loyalty, ensure that you do not let your customers down. You need to continue delivering high-quality services and products. This ensures that customers stick with your brand because they have confidence in your products or services.

  • Always ensure quality

To ensure that customers remain loyal to your brand, you have to continue meeting your customers’ quality expectations. Exceeding the value level of your product or services is what will make them keep coming back for more purchases.

  • Listen to your customers

In business, there are bound to be some hitches here and there. Things cannot be perfect all the time. For this reason, it is essential that you be there for your customers in the event that things go wrong with your brand. You can do this by answering back their phone calls, respond to any queries customers left on your social media platforms. Assure them of the measures you are going to take in order to rectify the problem.

  • Meet your Customer Anticipation

To continue earning customer loyalty, you need to go beyond your customer’s expectations. You have to anticipate the needs of your customers and ensure that they are adequately met so that you can earn their loyalty. For instance, you can ensure that your customers are fully covered by providing a lifetime warranty on your product. This will ensure that they remain loyal to your brand and at the same time, be able to attract new customers.

  • Be there for your customers

Another way of ensuring customer loyalty is to ensure that you listen to your customers. Regardless of whether the feedback is negative or positive, you need to treat each piece of information with the utmost importance. Note that when you open up a dialogue between you and your customers, it will solidify the connection they have with your product. They may even turn out to be your biggest advocates because of the concern you always show them.

  • Be True and Consistent

Being consistent is also paramount in ensuring that you maintain brand loyalty. Your customers rely on you to continue delivering the same quality services as well as products. By meeting this expectation, you will be able to ensure that their loyalty is retained.

  • Check up on your customers

Another way to ensure that your customers remain loyal to your service or product is to establish long-term relationships. Make a regular follow up to check on your customers’ experience with your product or service. This will ensure that customers are always satisfied leading to brand loyalty.

Difference between Brand Loyalty and Customer Loyalty 

Though brand and customer loyalty may appear the same, there are quite different from each other. Note that Brand loyalty is arrived at when a customer is satisfied with the experience a product or service is offering.

On the other hand, customer loyalty is achieved where incentive programs, coupons, free offers warranties extension is provided to entice customers. All these make customers happy and are persuaded to come back to make more purchases.

In a nutshell, customer loyalty is influenced by what is being offered. In this case, customers tend to go for what they think works well for them. Brand loyalty, on the other hand, is influenced by the experience customers have with the product or service. If the product is good and of high quality, customers tend to stick to this particular brand regardless of the price or convenience.

Reference for “brand loyalty”

https://www.entrepreneur.com/article/286767

https://trackmaven.com/marketing-dictionary/brand-loyalty/

https://en.wikipedia.org/wiki/Brand_loyalty

https://graduatedegrees.online.njit.edu/…/how-to-build-customer-loyalty-in-your-busines…

https://www.creativelive.com/blog/eco-friendly-entrepreneurs/       

Academic research on “brand loyalty”

Branding in small business, Barbu, M. C., Ogarcă, R. F., & Barbu, M. C. R. (2010). Branding in small business. Management & Marketing8(1), 31-38. With the appearance of deceptive sales, poor customer care and crooked promotion, keeping loyal customers becomes even more difficult. Even though pursuing consumer reliability costs time and effort, it is really themost valuable asset of a successful company.

Customer brand loyalty, Mao, J. (2010). Customer brand loyalty. International journal of business and management5(7), 213. In this paper we analyzed the branding in small business. Using a desk research on Internet and the press we have identified the practices small businesses use to enhance their brand and the brand dynamics in small business. Our main contribution is that we tried to figure out the strategy of branding in small business. This need further to be investigated in order to understand how branding works in small business and to better capture the role of branding in small business.

Econometric modelling of risk adverse behaviours of entrepreneurs in the provision of house fittings in China, Li, R. Y. M. (2012). Econometric modelling of risk adverse behaviours of entrepreneurs in the provision of house fittings in China. Li, Rita Yi Man (2012) Econometric modeling of risk adverse behaviours of entrepreneurs in the provision of house fittings in China, Australasian Journal of Construction Economics and Building12(1), 72-82. Entrepreneurs have always born the risk of running their business. They reap a profit in return for their risk taking and work. Housing developers are no different. In many countries, such as Australia, the United Kingdom and the United States, they interpret the tastes of the buyers and provide the dwellings they develop with basic fittings such as floor and wall coverings, bathroom fittings and kitchen cupboards. In mainland China, however, in most of the developments, units or houses are sold without floor or wall coverings, kitchen or bathroom fittings. What is the motive behind this choice? This paper analyses the factors affecting housing developers‘ decisions to provide fittings based on 1701 housing developments in Hangzhou, Chongqing and Hangzhou using a Probit model. The results show that developers build a higher proportion of bare units in mainland China when: 1) there is shortage of housing; 2) land costs are high so that the comparative costs of providing fittings become relatively low.

[HTML] Modelling and evaluating customer loyalty using neural networks: Evidence from startup insurance companies, Ansari, A., & Riasi, A. (2016). Modelling and evaluating customer loyalty using neural networks: Evidence from startup insurance companies. Future Business Journal2(1), 15-30. The purpose of this study is to investigate the customer–service provider relationship in the insurance industry using artificial neural networks and linear regression. Using a sample of 389 customers from 10 different startup insurance companies, it was found that artificial neural networks are an efficient way to evaluate the factors affecting customer loyalty. The results indicated that customer satisfaction and perceived value are significant predictors of customer loyalty. Additionally, it was found that trust, perceived quality, and empathy have a significant impact on both customer satisfaction and perceived value. The results also showed that customer commitment to service provider is positively associated with customer satisfaction and loyalty. After comparing the performance of linear regression models with artificial neural networks, it was found that the use of neural networks is a better approach for analyzing the customer loyalty, satisfaction, and perceived value. The use of new techniques such as artificial neural networks for analyzing the customer behavior can be particularly beneficial for startup companies who aspire to gain competitive advantage over their strong and well-established rivals.

Corporate social responsibility: Global perspective, competitiveness, social entrepreneurship & innovation.  Joshi, M., Tiwari, S. P., & Joshi, V. (2007). Corporate social responsibility: Global perspective, competitiveness, social entrepreneurship & innovation. Competitiveness, Social Entrepreneurship & Innovation (July 9, 2007). Profit Making & Social Responsibility is an oxymoron and can be strongly debated. Profit making is the essential reason for an enterprise to prolong and grow. Social responsibility is the fundamental duty of the state that must focus upon the upbringing of its stake holders with social justice. This includes proactive participation by the governance in elevating quality in work life of its citizens. Thus attempting the balance of wealth and social justice/empowerment, shall invite a synergy between the Public-Private partnership in enhancing the competitive existence & growth of national economy. State is a necessary evil. The primordial responsibility is governance and to bring order from disorder. The concept of city-states like Greece existed, which portrayed high level of self governance and self sustenance. Besides this, for a nation to be healthy and prosperous, the state must not hinder Liberty. The world has witnessed social unrest as a cause of economic disparity, inequality, social injustice etc. resulting into world wide protests, cross border and internal disputes, civil wars, battles, regional and the world wars. Hence, there must be continuous efforts to reduce this economic disparity amongst the country men but the irony being that the State is unable to execute its primary duties in the form of social responsibilities, either because (i) it is not able to mobilise funds, (ii) funds available are not adequate against the requirement, (iii) it is not able to utilise the funds or/and (iv) there is lack of governance and will power. As a result, the entrepreneurs in the micro community or corporate, emerge as entrepreneur cartel(s) to carry out this important assignment. They participate as social entrepreneurs and emerge as drivers to engine of economic and social growth. Strategic innovation, hence, emerges as an imperative tool towards a globally competitive existence and performance.

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