What Is Brand Loyalty and Why Your Small Business Needs Die-Hard Fans

Every business needs returning customers, but building loyalty goes beyond that: it’s the foundation for a business’s overall success and sustainability in today’s competitive landscape, especially for small companies. When people become fans of a brand, they form a bond with the business that makes them buy repeatedly from it, and they can become brand ambassadors that recommend to their family, friends and acquaintances the products and services they genuinely use and love (aka free advertising!)

This time, we will explore the intricacies of brand loyalty, why it’s essential for small businesses and one of the best real-life examples that will inspire you to build your fanbase.

What’s Brand Loyalty?

Brand loyalty is the level of consumer faithfulness towards a particular brand. It reflects the customer’s consistent preference for and repeated purchasing of products or services from a specific brand over time and is built on a positive customer experience, satisfaction with the brand, and the establishment of a strong emotional connection between the consumer and the brand.

To consider a customer loyal, it has to check the following boxes: 

  • Consistent preference: Customers must consistently prefer a specific brand, even when faced with competing alternatives.
  • Resistance to switching: We can use the saying “better the devil you know than the devil you don’t” to describe this resistance, as devoted customers are less likely to switch to a different brand, even if presented with similar offerings or lower prices from competitors. Resistance to changing brands varies depending on age, too, as senior customers tend to be more resistant to trying new brands than younger ones.
  • Emotional connection: This emotional bond can be based on shared values, trust, or a positive brand image, and it’s closely related to the human brain. A study conducted by Japanese neuroscientists found that we develop similar attachments to brands as to people because when study participants were shown images of their preferred face cream brand, two regions of their brain were activated: the left ventral pallidum and the right posterior cingulate cortex, both of which are related to human relations like maternal and romantic love.
  • Brand advocacy: Loyal customers may spontaneously promote and defend the brand through word-of-mouth and testimonials, contributing to its reputation and credibility in the market. Having brand advocates is one of the most important marketing assets a business can have, as a whopping 92% of consumers trust the recommendations of people they know. 
  • Forgiveness of mistakes: Let’s face it, every business makes mistakes every now and then. In the event of a pitfall, loyal customers are more likely to forgive and continue their relationship with the brand.

Why Brand Loyalty Matters: The Numbers

At this point, I’m sure you acknowledge the value loyal customers can bring to your business. But there’s even more data supporting the case for brand loyalty that we’ll make you start working to build your clients’ loyalty immediately:

  • Loyalty drives cash flow, as loyal customers can buy up to 90% more frequently from their preferred brands.
  • Customer acquisition is 6-7x more expensive than retention marketing.
  • Loyal customers can spend 67% or more than new ones. 
  • Happy clients are 87% more likely to buy upgrades or other products from the same brand. 
  • Returning customers will likely spend up to 33% more on subsequent purchases. 
  • Businesses that increase their retention by 5% could expect up to a 25% increase in profit.
  • Chances to sell to current customers are between 60% to 70%. On the other hand, the odds drop to 5 – 20% when selling to new customers.

The numbers speak for themselves. Turning your customers into loyal fans is the easiest, cheapest and most sustainable way to grow your business. 

Brand Loyalty vs. Customer Loyalty

There’s another term related to loyalty that tends to confuse people, and it’s important to mention: customer loyalty. Here’s how they’re (a little) different:

  • While brand loyalty is heavily influenced by emotional connection and perception, customer loyalty is driven by other factors such as pricing, tailored deals, familiarity, and customer service.
  • People loyal to a brand are prone to spend more on a brand they love due to their trustworthiness and quality perception, while the loyal customer will weigh their options and go for the best deal, even if they like more or all the brands they’re considering. 

Simply put, if you raise the price of a product, the loyal customer will research other options immediately and jump from brand to brand without thinking much. In contrast, a shopper who formed loyalty towards your brand will likely still buy from you.

  • Brand loyalty is easier to maintain once formed. As we said above, loyalty is linked to emotions and won’t break that easily. Customer loyalty is ongoing work, as brands must constantly think of new promotions, benefits or rewards to keep their existing clientele choosing them. 

The difference is subtle, but both are essential for businesses seeking solid and lasting connections with their customers. 

Brand Loyalty Power: The Best Real-life Case

Apple 

We can’t talk about brand loyalty without mentioning Apple. This company is the gold standard on how to keep customers for life, keeping them buying a new overpriced iPhone every year (even if said “new” model does the same thing as the older one, or there are alternatives at a fraction of the price, but I digress.) 

So, how do they do it? Is it witchcraft? Not exactly, but it’s a mix of strategic decisions, product innovation, consistent high quality, solid work in branding and marketing, and excellent customer experience.

Innovative, long-lasting products 

Apple is known for its innovative and aesthetically pleasing products. The company excels at introducing cutting-edge technology and design, creating a sense of anticipation and enthusiasm among its customer base and the general public. 

Apple’s products not only look good, but they are comparatively made to last, and the company knows this; that’s why they offer software updates for a significant period (as long as ten years), ensuring that older devices remain functional and up-to-date, which encourages customers to stick with Apple over the long term.

Brand image and status

Apple has cultivated a strong brand image associated with innovation, quality, and a modern lifestyle. Apple users have a sense of a certain status and aspirational value, contributing to customer loyalty.

To achieve this, Apple goes above and beyond with attention to detail. They even have a dedicated packaging designer who spends months opening prototype boxes to find out which offers the most pleasing and joyful experience. 

Not your regular cardboard package box. Apple’s perfectly-dimensioned packaging is the starting point for a feel-good customer experience. (Apple via Packmojo)

Apple also emphasizes design and aesthetics in all aspects of its client interaction. From their famous sleek product designs to their beautiful, elegant Apple stores, everything in the experience of being an Apple customer feels cohesive and makes people think that they’re not just buying a phone or a computer; they are living a memorable sensory experience, and that makes them go back for more.

Marketing and Branding

Apple knows that evoking emotions is powerful in business, and its marketing strategies are often focused on creating and reinforcing those emotional connections with customers.

Their advertising campaigns focus on telling compelling stories emphasizing creativity, innovation, and the human connection their products enable. With succinct yet iconic taglines like “Think Different,” “Get a Mac,” or “Shot on iPhone”, Apple’s ads have successfully positioned its brand and products in the minds of consumers worldwide.

Apple’s ads are famous for always having a narrative that breaks the mold and goes against the establishment, associating those values with using their products.

Another marketing tactic that has put Apple above other brands is its product launch events. Often accompanied by promotional videos, these events became famous for generating a lot of excitement and anticipation in the general public and the technology industry due to their high production value, innovative product unveilings, live product demos, and their presenters, with Steve Jobs as the most famous and memorable one.

Steve Jobs’ presentation skills significantly contributed to the success of Apple’s launch events. (Inc.)

Outstanding customer service

If you buy an Apple product and have a malfunction, you can bet somebody will fix it. Apple has a strong customer service strategy and offers multi-channel support through the Apple stores, website resources, phone, and chat. They also offer a comprehensive one-year warranty for all its products that can even cover a brand new product if the malfunction continues, free of charge. On top of that, there’s also AppleCare Plus, an optional warranty extension for iPhone that protects against incidents like broken screens or theft and includes exclusive 24/7 support.

In stores, clients have access to personalized support where they can experience the famous Apple’s steps of service in person:

  • A: Approach customers with a personalized, warm welcome.
  • P: Probe politely to understand all the customer’s needs.
  • P: Present a solution for the customer to take home today.
  • L: Listen for and resolve any issues or concerns.
  • E: End with a fond farewell and an invitation to return.

The company trains all their customer staff following this philosophy to a T: they have a comprehensive knowledge of Apple’s ecosystem of products and services, and the stores’ employees can offer personalized recommendations and educate customers on how to make the best out of their experience using Apple. They’re not called “Apple Geniuses” for nothing. 

All these elements have worked in synergy over the years to turn Apple into one of the most successful companies in the world, the #1 in the consumer electronics industry, and a universal example of how to keep a cult following of satisfied customers that take pride in having Apple as part of their lives.

How to Get Loyal Customers

Not every business can (or wants to) become the next Apple, but we all can learn from them. Here are some effective strategies to build and enhance brand loyalty from a small business perspective:

  • Quality above everything: Prioritize delivering high-quality products or services from the client’s first contact with your brand. Quality builds trust, satisfaction, and positive word-of-mouth.
  • Provide exceptional customer service: most businesses can create brand loyalty by putting extra care into their customer service, as a global customer survey conducted by Acquia revealed that service is the number one item for loyalty, and 61% of respondents admitted cutting ties with a business if they experienced poor service. 

And despite what the statistics may say, getting new clients is hard, so why not treasure the ones you get? Always address inquiries, concerns, and issues promptly. If you have staff, replicate Apple’s service style and invest in training your team to be knowledgeable, empathetic, and solution-oriented.

  • Build a strong brand: from the messaging to the visual identity, your brand needs to send a cohesive message to your audience. A coherent brand presence helps create a robust and recognizable image in customers’ minds and their experience buying from you. Focus on building emotional connections with your clients. Connect your brand story with their aspirations, values, and lifestyles.

We have plenty of resources to help you polish your brand, from our resources library to our branding section in the blog. 

  • Implement a loyalty program: this is a very popular option for brand loyalty because people love it: consumers tend to share with their friends and family their experience with brands with loyalty programs and spend between 12 and 18% more each year.

However, if you don’t have the resources to provide attractive rewards, it’s best to skip this one: if your customers don’t think the rewards are satisfactory enough, they are more prone to abandon the brand.

  • Listen to feedback: last but not least, ask for your customers feedback and use it to make improvements. Demonstrating that you value customer opinions and act on feedback can strengthen their connection to your brand.

Loyal Customers Are the Life-Blood of a Business

Loyal clients can provide the steady revenue and sustainable success you need to grow your small business. By incorporating loyalty as the foundation of your marketing and business strategy, you can work towards building a strong connection with your customers and turn them into your ambassadors.