It’s a well-known fact that retention costs far less than acquisition.Yet significantly more companies focus on the latter, resulting in a far more shocking fact: the average customer retention rate is below 20% in nearly every industry. Brand expert Nancie Mcdonnell Ruder points out that even in the brands that recognize the value of retention and loyalty, leaders often make the mistake of conflating brand loyalty with consumer loyalty.
On the Drive Profit with Purpose Podcast, Nancie explains that brand and customer loyalty are both essential to businesses, but while the two concepts share a similar title and a common goal, they are significantly different. Customer loyalty is achieved through deals and promotions, while brand loyalty is inspired through emotions and perception. Customer loyalty helps you to retain customers in the short-term, but brand loyalty empowers you to retain customers for years to come. Here’s how to achieve it:
Start with the end in mind.
Like consumer loyalty, brand loyalty is achieved by design, not by chance. The image that brands create and emotions they evoke are meticulously planned and carefully crafted to resonate with people. So, set SMART* goals for your organization, and plan ahead. Determine the retention rate you aim to achieve, uncover the audience with whom you wish to connect, and unlock the experience you aim to deliver.
Listen to inspire loyalty.
While it’s essential that your brand remain authentic to who you are, it’s also essential that you share who you are in a way that resonates with your audience, and that you deliver the products and services your audience needs when they need them. So, do as much research as your budget allows, and be sure to take an objective perspective. Approach your research from all angles. Undertake A/B testing. Put systems of accountability in place. And remember that to craft an experience that connects– asking the right questions is more important than getting the right answers.
Constantly measure your brand sentiment.
Take measurements beyond purchasing volume, repeat purchase, and lifetime customer value. Continuously evaluate internal, external, prompted, and organic feedback to determine whether your brand is achieving your mission, living your values, and retaining your customers. Ask questions that assess experience quality, value alignment, and perceived authenticity. Measure brand sentiment as robustly as you can and look for trends. Put your findings in context with your past numbers and those of your competitors, but don’t just look at where you’ve been; look at where you’re going.
Adapt as necessary.
The aspects of your business that first attract consumers won’t necessarily keep them there. As times, audiences, and demands shift, brands must evolve. It’s intuitive to adjust your price point with the market, but the necessary shifts to your message and overarching marketing plan are not always as obvious. Be sure to adjust your strategy and business in accordance with your ongoing research, but never waiver on your values or your purpose.
Emphasize the experience.
Prices don’t evoke emotions; stories do. And emotions shape decisions. But your stories need to be more than words alone to carry weight. Your messages can’t shape the entirety of your brand. Your experience has to match. Companies don’t just establish their values, purpose, and stories by telling them with customers. They need to actually live their brand. Authenticity is the only way to inspire brand loyalty.
As brands focus their efforts on outmaneuvering one another through low prices and great deals, the concept of loyalty has become overly commercialized, and brand authenticity is often overlooked. However, balancing short-term needs with longer-term brand building is the only sustainable formula for profitable growth. Above competitive prices, share superior experiences.
*SMART – Specific, Measurable, Achievable, Relevant, & Time-bound