Brand Loyalty: A Guide for Business Owners

goblet trophy, brand loyalty

If you have an iPhone, MacBook, or iPad, you know Apple products aren’t the cheapest. But they’re reliable, high quality, and work seamlessly with each other. People who like Apple often love Apple, and they’re willing to line up for and pay a premium for the newest iPhone model. It would take a lot for them to convert to buying the latest Microsoft PC or Samsung smartphone.

Apple’s success, aside from having top-notch technology, is due in large part to having built a culture that resonates with target audiences. Its story demonstrates the power of brand loyalty, and businesses of all sizes can follow its example to increase revenue and support long-term success.

Table of contents:

  1. What is brand loyalty?
  2. What building brand loyalty means for the bottom line
  3. 5 strategies for building brand loyalty with your customers
  4. Brand loyalty FAQ

What is brand loyalty?

Brand loyalty is a condition in which a customer feels a strong attachment to a particular company. Brand-loyal customers are less motivated by price and convenience than other customers are, and they are often willing to pay more (or look harder) to acquire their desired product or service, which they often believe to be the superior offering in the market.

Essentially, strong brand loyalty is about belief. When a consumer becomes loyal to a brand, they may feel this connection is an aspect of their personal identity, and that the brand represents and even understands them. When a brand-loyal customer believes that affiliation with your brand says something about who they are, they’re no longer in the market for a substitute. To switch brands, they’d need to reexamine their own identity—a strong disincentive for making a change. This kind of brand loyalty can ensure stability in the marketplace and be a powerful driver of business growth.

What building brand loyalty means for the bottom line

Apparel company Bombas sells women’s ankle socks starting at $13 a pair, and performance compression socks at $36. Even though they don’t have the cheapest prices, Bombas has experienced significant growth since its 2013 founding—in 2021, the business reported over $250 million in revenue. One reason it can charge more and still make so much is because it has focused on building a sense of brand loyalty. Bombas refers to employees and consumers who promote it in their networks as “true believers”—loyal advocates who are willing to pay a higher price for its products.

A major benefit of brand loyalty is that you have the latitude to increase prices (within reason). Here are some other benefits brand loyalty can bring to your bottom line: 

  • Increased profit margins. Building brand loyalty increases customer retention rates, and even small improvements in customer retention can generate increases in profit.
  • Competitive advantage. Brand-loyal customers are unlikely to try out a new product from one of your competitors or be tempted by bargains or promotions. Companies with a brand-loyal customer base enjoy stability in the marketplace and competitive advantages over those that don’t.
  • Audience growth potential. Brand-loyal customers frequently become brand ambassadors. They are more likely than other customers to refer new customers to your business, increasing the size of your customer base.
  • Flexibility to experiment. Loyal customers can give your business the freedom and flexibility to experiment. Launching an innovative new product is less risky, for example, if you have a base of brand-loyal customers who are likely to try your new product and will be biased toward approval. If your launch fails, your other strong products, services, and customer experience make your business more likely to recover.

5 strategies for building brand loyalty with your customers

Brand loyalty is a strong driver of future business growth. These five strategies can help you build brand loyalty with your customer base.

1. Provide high-quality products or services

Product quality is the baseline for brand loyalty. If new customers buy your product and it falls apart or proves to be a bad experience, there is very little chance of them coming back to become a brand-loyal customer.

Maintaining product quality is also critical for your existing customer base. Although brand-loyal customers may be willing to pay more or look harder for a product they believe in, they won’t tolerate a decline in quality—and some might even consider it a personal affront.

This can be trickier than it sounds. Companies with strong brand loyalty often experience rapid growth, and the pressure to scale can change how you manufacture and deliver your products. If consumer demand outpaces your ability to meet it, consider implementing a waitlist instead of sacrificing quality for the sake of speed.

2. Focus on customer experience

Like product quality, customer experience is a key driver of brand loyalty. Stellar customer service can positively impact how customers feel about your business and keep them coming back. Consider monitoring customer satisfaction metrics like Net Promoter Score so you can track your performance and be on the lookout for any issues. As with product quality, make sure that rapid scaling doesn’t affect customer experience.

To build and maintain a loyal customer base, some businesses engage in proactive customer service activities. For example, if a customer’s nine-foot-tall stuffed giraffe order was delayed due to a snowstorm, you might call to apologize and ask if they needed it for a particular event. If the giraffe will be late for a toddler’s birthday party, for example, you might proactively send a gift card to a local ice cream shop. If the giraffe wasn’t time-sensitive, perhaps you offer free shipping on the customer’s next order. 

3. Develop a strong brand identity

Loyalty requires an object: When you’re loyal, you’re loyal “to” something—and brand loyalists are loyal to your brand. 

To encourage brand loyalty, develop a unique brand identity that effectively represents your company’s personality and values and differentiates you in your target market. Once you’ve established a brand identity, implement a brand management strategy that ensures that all marketing and communications consistently reinforce your main brand identity.

4. Start a customer loyalty program

A customer loyalty program can help you build brand loyalty, retain customers, and generate referrals. Consider starting a rewards program to encourage repeat purchases and to thank frequent customers for their commitment to your brand. You can also award points to customers who make a purchase, refer a friend to your business, or promote your brand on their social media platforms. 

5. Get personal

Encourage brand loyalty with a customer service and marketing strategy that builds personal connections. For example, consider sending marketing communications that thank customers for individual purchases. For high-value customers, you might even consider making a phone call to say something like, “Hi Susan! I’m calling from BabyLimeTime to thank you for purchasing 14 key lime trees from our nursery. That’s a lot of limes! I just wanted to check in to see how your trees are doing and ask if you have any questions about their care.”

Consumers don’t typically expect (or receive) this kind of personalized attention, and offering it can differentiate you from your competitors and generate brand loyalty.

You can use marketing tools to automate parts of this process. For example, email marketing tools can automatically address customers by name and create personalized content based on customer behavior. Susan, for example, is a good candidate to receive your citrus tree care guide and, later on, your grandma’s prized key lime pie recipe.

Brand loyalty FAQ

How can businesses measure and track brand loyalty?

Businesses can evaluate brand loyalty by measuring the number of repeat customers as well as looking at metrics like customer churn and the average total lifetime value of a customer. You can evaluate and monitor customer experience, which supports brand loyalty, using a metric like Net Promoter Score (NPS).

Can brand loyalty be influenced by pricing and promotional strategies?

Brand loyal customers hold a steadfast belief in the superiority of a particular brand’s product quality, and are less likely to be price sensitive. Introducing promotions or cutting product prices too much may actually dent their perceived value and damage brand loyalty. Loyal customers can be offended by seeing their cherished brands exiled to the bargain bin, and this may even cause them to question their belief in your brand.

How do changes in customer needs and preferences impact brand loyalty?

Once established, brand loyalty is both durable and strong. Although customer needs and preferences change constantly, a brand-loyal customer might continue to patronize your brand even if it’s no longer the most affordable or convenient option. They may look for an alternate product or service under your brand. Even if they leave your brand entirely, they’ll likely refer your brand to others and return to your company when their circumstances change.

What role does customer service play in building and maintaining brand loyalty?

The most powerful form of brand loyalty occurs when a consumer believes their brand affinity is an aspect of their personal identity. These customers don’t just believe that your products are superior—they believe that your brand understands, represents, and cares for them as individuals. Excellent customer service can build this type of brand loyalty—and poor customer service can quickly erode it.

Wrapping Up:

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