Friday, January 27, 2023

Four key elements for gaining and improving customer and brand loyalty

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Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

CEO of Anabasis, Inc. Serial entrepreneur, author, college professor, innovation leader, venture investor, consultant and public speaker.

In my experience, customer loyalty comes from relevance – continuous and dynamically appropriate relevance. Loyal customers have an intense relationship with the character (brand) and offering (product or service) of a company.

To win loyalty, a brand must be consistent in vision and execution and aligned with customer values. It should also offer offers that represent a bundle of satisfaction that replaces product functionalities. Customers make friends more quickly with brands with a clear character. Think, for example, of Nike and its “just do it” attitude, Tesla (or Elon Musk himself) as a “disruptor”, the US Marines offering pride and achievement, or Apple with the “think different” mantra. The character of a brand must be reflected in the products and services as well as in the organizational structure and the relationship with all its stakeholders.

Customers become loyal when they trust the promise a brand makes and see that promise fulfilled in the product and services it provides. Customers remain loyal when trust is not only maintained, but continually strengthened as the business remains relevant to them over time.

To maintain loyalty, your character and offerings must always remain relevant, otherwise you risk not only irrelevance but also infidelity. I’ve found that there are four key steps to capture, maintain, and develop customer loyalty.

1. Transferred inertia

To win customer and brand loyalty, you must either shift your competitor’s loyalty inertia to you or create inertia around your presumably uncontested brand and offering.

If your customer is already a friend and loyal to another brand, you need to prove you can be a better friend who aligns better with their values ​​and is more relevant to their needs. Strong brand affinities are very hard to break; just ask any Apple loyal customers or people who like Coke. Cutting ties and passing on a competitor’s inertia requires a strong exchange of value and customer trust.

If your brand is not facing a strong incumbent, the first challenge is to clearly identify who you are and how your processes and products express your character (brand) through every customer touchpoint (moment of truth).

In both cases, the winning factor is your authenticity. Your true character always reveals itself when the rubber touches the road (when services or products are provided and supported). When you deliver the promised value, you meet the expectations of your customers and other stakeholders. This is not a fake-it-till-you-make-it proposition. Pretending is the kiss of death!

2. The Fivefold Exchange

A business thrives or dies based on its “exchange” relationship. Your company offers a bundle of satisfaction wrapped in your brand; in return, customers provide money and loyalty. Think of Ferrari with its promises of speed and expressed wealth; Volvo with its proposal for safety and luxury; or Honda that offer confidence and affordability. It’s the exchange that drives customers to buy – an exchange that, in my experience, is always based on more than just product functionality. A two-way trade between your customers and your company can involve price, speed, emotional or moral attachments and more – collectively referred to as the bundle of satisfaction.

A similar exchange relationship exists between your organization and its other key stakeholders. Employees receive pay, benefits, options, career advancement and innovation opportunities, and in return they provide loyalty and hard work. Investors receive an ROI and sometimes social alignment in return for capital. Business partners can get fair prices and consistent orders in exchange for quality and timeliness, and finally, society as a stakeholder can get employment opportunities and responsible corporate social responsibility in exchange for tax benefits.

Collectively, the five organizational exchange relationships between your organization and your stakeholders determine the character of your brand, which leads to lasting loyalty. In short, the exchange with customers is extremely important, but it is the balance between all exchange relationships that builds trust, crystallizes your company character and differentiates your brand. To gain loyalty, try to define your exchange relationships very clearly and check how relevance can affect them.

3. Evolving relevance

Those who are loyal to you change, and what is relevant to them is also always changing. You must evolve or die, or at least compromise growth; think of the demise of Blockbuster and Blackberry and beyond marker erosion of the GAP, all giants who ignored change and relevance. Businesses fade and lose loyalty as they remain irrelevant to customers and other stakeholders.

Generational shifts (baby boomers, millennials, Gen-Z), technological advancements and societal priorities are constantly influencing and redefining relevance. Every day Instagram, TikTok and Uber are born, impacting the dominance of Facebook and taxi services around the world. Amazon’s free next-day delivery is now expected of everyone, and the 8-second answer to Google’s online search queries defines the need for service flexibility. More and more bank branches are closing because they lose relevance and car navigation systems are replaced by map apps.

Loyalty deteriorates when your relevance is compromised. Relevance is never absolute and forever; it is always in transition and evolving. To stay relevant, you must be committed to evolving as your markets, customers and other stakeholders evolve.

4. Persistent Devotion

Your competitors are always out to break the loyalty inertia of your customers. They explore and adapt to what your customers expect, evolving to stay relevant and gain an edge. Your competitors are trying to build better overall exchange relationships. To win, you must remain committed to always doing the same thing.

Your continued commitment to developing your market relevance and enhancing your exchange relationships should remain at the core of your character and authentic brand. To earn loyalty and maintain your customers’ trust, you must continually re-commit to dynamically change and achieve relevance by tailoring your brand and offerings to both customers and other stakeholders.

When it comes to sustainable loyalty, there are no ready-made solutions. Business Council is the premier growth and networking organization for entrepreneurs and leaders. Am I eligible?

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