Sep 09, 2008
What is Brand Loyalty?
by Bi3ard / General
Brand loyalty is the ultimate goal that one company sets for a branded product. This article focuses on it, its importance to a company, and steps necessary to brand loyalty.
What is Brand Loyalty?
In short, brand loyalty is a consumers’ preference to buy a particular brand in a product category, because they perceive that the brand offers the right product features, images, or level of quality at the right price.
This perception becomes the foundation for a new buying habit.
Usually, the brand loyalists have the following mindset:
- I am committed to this brand.
- I am willing to pay a higher price for this brand over other brands.
- I will recommend this brand to others.
Why is Brand Loyalty Important?
There are three main reasons why the brand loyalty is important:
Higher Sales Volume - The average US company loses half of its customers every five years. This illustrates the challenges that companies face when trying to grow in competitive environments. To make it simple, achieving even 1% annual growth requires increasing sales to customers, both existing and new, by 14%.
Reducing customer loss can dramatically improve business growth and brand loyalty, and both will lead to consistent and even greater sales.
Premium Pricing Ability - Studies show that as brand loyalty increases, consumers are less sensitive to price changes. This means that customers are willing to pay more for their preferred brand, because they perceive some unique value in the brand that other alternatives do not provide.
Retain Rather than Seek - Brand loyalists are willing to search for their favorite brand and they are less sensitive to competitive promotions. The result of this is lower costs for advertising, marketing and distribution.
How to Create and Maintain Brand Loyalty?
Consumers must like the product in order to develop loyalty to it. That’s the whole philosophy of brand loyalty.
In order to convert occasional purchasers into brand loyalists, some habits must be reinforced. This means that consumers must be reminded of the value of their purchase and encouraged to continue purchasing the product in the future.
To encourage repeat purchases, advertisement before and after the sale is very important. In addition to creating awareness and promoting initial purchases, advertisement shapes and reinforces consumer attitudes, which mature into beliefs, and which need to be reinforced until they develop into loyalty.
For example, the most avid readers of travel ads are those who just returned from the destination. These ads reinforce travelers’ perception and behavior, turning the purchaser into a loyalist.
In order to create and maintain brand loyalty, you should also remember following guidelines:
- Develop an unbeatable product - Make sure your customers can get what they want from your product.
- Give customers an incentive to repeat-purchase – Prizes, gifts, coupons are necessary step that will stick customers to your brand.
- Stand behind your product – Keep in mind that if your customers don’t trust the product, they won’t purchase it again.
- Know and treat your VIP customers best of all - Remember the rule that 80% of your sales will come from the top 20% of your customers.
- Make it easier to buy your brand than competing brands- Be available and simple. Customers appreciate convenience today more than ever.
- Go to your customers - Bring your product to customers when possible.
Those were some basic guidelines how to create and maintain brand loyalty.
|
|
|
COMMENTS
Readers posted 0 comments for this article
|
