Said simply, brand loyalty leads to repeat business and a boost in business drives profitability. According to Statista, 65% of customers demonstrate brand loyalty by buying more products or services, and 61% will end up making product recommendations to people they know. Additional Statista research highlights the importance of brand loyalty by showing that 60% of Millennials stick to a brand when they like it.
Brand loyalty also reduces costs: It costs five times more to attract a new customer than to generate sales from existing customers. This empirical study of the hotel industry also shows that hotel businesses, for example, enjoy sensible financial benefits from higher brand loyalty. While the sample was restricted to lodging services, the conclusions and implications are definitely valid for a wide range of services: As Accenture’s research shows, consumers spend more when they’re loyal to your brand.
3 main drivers of brand loyalty
Since brand loyalty has such a significant impact on business performance, customer retention, and overall satisfaction, it’s essential to understand what are the main drivers of brand loyalty. While there are many candidates, three elements form the foundation of a customer-driven online business.
- High level of engagement with the customer: Ensure active social networks, and make yourself available to answer all the inquiries from your customers. In addition to that, positive online reviews are a great way of attracting and retaining customers, so make sure ask for and interact with them.
- Focus on meeting the customer needs: Instead of simply buying products, customers buy solutions. Understanding your customers’ needs is essential for developing and presenting products that not only sell but also transform the customer into an advocate of your brand.
- Consistency across multiple channels: A consistent brand facilitates its recognition and improves its online presence. Whether online or offline, define the visual identity of your business and keep it consistent across your activities.
Use social listening to understand customer expectations and build brand loyalty
While the first and third drivers mentioned above are mostly dependent on your business initiatives, understanding customer needs involves deeper research into your target market. In addition to traditional market research and relationship management, Social Listening is a strong source of information to create detailed customer profiles. Sprout Social offers a great definition of the concept:
Social listening is the process of tracking conversations around specific topics, keywords, phrases, brands or industries, and leveraging your insights to discover opportunities or create content for those audiences.
As a starting point, we recommend you focus on three main aspects of online conversations. The first one, conversations related to your brand, focuses on identifying both positive and negative aspects mentioned by users and to obtain insight into how your business can improve its services. The second, conversations around your industry, is aimed at keeping you at the top of trending topics and latest news. Finally, the third, conversations around your competition, helps you identify the online marketing strategy of your competitors and how their customers are rating and criticizing their business.
While there are many available tools to cover different aspects of social listening, we recommend starting with a short list before expanding the scope of your efforts. Each of the following three tools focuses on one of the aspects mentioned above:
- Buzzsumo: Helps you track the most popular articles, influencers, and topics in each industry. It is a definitive tool to understand what are the latest preferences of your customers.
- HootSuite: Very useful for tracking your activity on social media, as well as what mentions from your audience related to your online brand.
- Mention: An incredible tool that lets you monitor your brand across multiple online and offline channels, as well as keep track of your competitors’ activities.
Listen carefully. Look out for a customer complaints, product requests and recommendations, praise as to what you’re doing right, trending topics and other insights into customer expectations and how she feels about your products and services.
Final words
The next step is to analyze the data to obtain useful insights. Many of these tools will give you the possibility to generate automated reports that facilitate integrating the information into your current business strategy. By creating a data-driven approach to understanding the real needs of your customers, your business will soon start enjoying the many financial and reputational benefits of a higher brand loyalty!