Do not expect a Harley Davidson motorbike owner to switch to another brand it won’t happen. Similarly Apple mac users are loyal to the brand, company and products. Apple and Harley enjoy high brand loyalty indicated by customer retention rates. An average firm will loose 50% of it’s customers in five years but this may be only 10-15% with a loyal brand.
Banks and financial organisations have relied on indifference and inertia to support pseudo loyalty which seems very one way at the moment. Only spurious loyalty is created by contracts, tie ins and market failure. As the insurance companies found out via comparison web sites loyalty works both ways and it is counter productive to offer better deals to new customer than existing ones.
Loyalty is a feeling and commitment towards a brand and goes deeper than a repurchasing of the brand. Loyalty needs to be worked on as a part of your intellectual asset strategy. In some sectors the ability to get good referrals or testimonials from happy customers is key to brand success, in others the maintenance market or after sales margins may be driven higher by high loyalty.
1 comment so far ↓
Chris,
thank you for your post. You are 100% correct in your thoughts on loyalty. To go further: We now know that loyalty is an emotional reaction. In fact, without emotion, we cannot create loyalty. This means that satisfying customers is no longer enough, we must do more. The highest level of commitment occurs when a customer finds authenticity in a brand (the customer’s experience are congruent with the communicated or perceived purpose), this is what you’re calling “being on brand” – however, the additional ingredient is that the customer considers the brand values shown by this authenticity as aligned with their own.
At this point you have true loyalty for which customers might tatoo your brand on their arms.
thanks again for your post.
Rudy Vidal
http://vidalconsultinggroup.com/blog
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