Building Your Brand to Create Customer Loyalty
Loyal customers aren’t just nice to have. In fact, customers who return and speak well of a company to their friends, family, co-workers, and social media circles are crucial to the success of many small businesses.
They also aren’t created by luck or happy accident. They’re built with the right mix of product, price, and service, and they’re sustained with consistent messaging that inspires them to remain loyal to the brands they like.
Large and small businesses employ a myriad of strategies to build customer loyalty. Here are a few examples:1
- Harley-Davidson® sponsors “brand fests,” where customers meet and share their experiences.
- Netflix® and Amazon® use personalization to get to know their customers.
- Ikea® and Seventh Generation® emphasize their commitment to sustainability.
- Tesla® introduced a high-end niche product to create an aspirational brand.
- Amazon Prime® offers faster shipping, cloud storage, digital content, and customer support for one value-based price.
Why Consistent Messaging Matters
The diversity of these examples demonstrates that loyalty isn’t a one-size-fits-all proposition. Rather, there are many approaches that can keep customers engaged with a company’s brand.
What’s important is what these strategies have in common: consistent messaging. The message may be about pricing, innovation, community, entertainment, service, personalization, commitment, aspiration, or another brand characteristic that customers value. Regardless of the content, small businesses need to develop a message and reinforce it to inspire loyalty to their brand.
Successful Customer Loyalty Programs
A strategy that’s conspicuously absent from these examples is the customer loyalty program, which offers customer discounts, promotions, personalized services, early access, or other perks as incentives to remain loyal.2
Loyalty programs can work, but it’s important to keep a close eye on key performance indicators (KPIs) to make sure customers don’t lose interest. KPIs can include redemption and churn rates as well as the value of rewards.
A recent study found that typical loyalty programs deliver fewer results and cost far more than most businesspeople realize. However, despite that bleak conclusion, the global consulting firm recommended reinvention, not termination for loyalty programs. To reinvent a program, companies need to:3
- Shut down strategies that don’t contribute to the bottom line
- Reorient rewards away from discounts and toward value-added experiences
- Focus on customer retention and word-of-mouth referrals
- Incorporate celebrity endorsements, supporting causes, personalization, innovative experiences, and access to exclusive offers to entice millennials
Beyond Loyalty: Relevance
The final piece of the customer loyalty puzzle is to move beyond loyalty to relevance.
To achieve relevance, companies need to think beyond product, price, place, and promotion to purpose, pride, partnership, protection, and personalization.
These are important for a small business to create and sustain customers’ brand loyalty today.
Let’s talk about your business.
For more information on KeyBank’s capabilities, contact your KeyBank Relationship Manager.