In an age where competition is extremely fierce, brands need to encourage loyalty. Driven by new and progressive ideas, as well as channels, consumers now have more power and influence as opposed to ever before. The challenges of recent years drove consumers to demand more from the brands that they support. Those that don’t heed the changing needs of the consumer will be left behind.
The term ‘brand loyalty’ refers to the positive association which consumers attach to a specific product or brand. Customers who display brand loyalty are dedicated to a product or service, which is shown by their repeat purchases in spite of competitors’ efforts to entice them away.
Corporations invest substantial amounts of money in customer service – as well as marketing – in order to create and maintain brand loyalty for a proven product. The Coca-Cola Company is an example of an iconic brand which has resulted in customers demonstrating brand loyalty over the years despite Pepsi’s products and marketing efforts.
Why Does Brand Loyalty Really Matter?
First and foremost, brand loyalty may drive sales. When something has the ability to put more money in the cash register, business owners tend to take notice.
Customers who are loyal to your brand come back time and time again. Achieving this type of customer retention is a major win for businesses.
For an average business, research shows that loyal customers account for 20% of your entire customer base however that 20% drives 80% of your business’s revenue as well as 72% of total visits to your business.