Brand loyalty is crucial for so many reasons, and is a subject that has always fascinated me.
Since the recession, shoppers continue to be price sensitive, savvy and tend to shop around. Research we have conducted into shopper behaviour shows that this savviness could be here to stay. Brands need to incorporate these shopping habits into their business strategy to retain customers, as well as encourage brand loyalty and spend: especially as the cost of acquiring a new customer is 6-8 times the cost of servicing an existing one. Only 22% of customers* are loyal to a particular brand, so brands need to work hard to gain and maintain customer loyalty.
THE THREE LEVELS OF LOYALTY
Obviously, loyalty levels will differ by sector but no matter which sector a business is in, the same principles broadly apply.
The first steps to gaining and maintaining loyalty is getting the marketing mix right for your customers. Consumers may switch brands if they have low levels of suitable customer interaction and are dissatisfied with elements of the offer.
To achieve true emotional loyalty is so much more….brands need to fully understand their customers – their thoughts, feelings, motivations, values, lifestyle, shopping habits etc. as well as provide a personalised and relevant offer to that customer. John Lewis, Apple and Harley Davidson could be identified as ‘super brands’ that have a strong loyalty following because they offer products and services that their consumers want and love.
TRACKING BRAND LOYALTY – WHO IS WINNING?
A recent benchmarking study we did at Marketing Sciences Unlimited, where we asked shoppers to rank how ‘proud’ they felt to be a customer of various retailers, showed that there are some brands that are doing it well, and others who still have some way to go. The Waitrose and John Lewis effect is well known, and we see this clearly in our study. We can see that 65% of Waitrose customers say they FEEL PROUD to shop there. This is only marginally lower for John Lewis at 64%. Whilst it isn’t uncommon for premium retailers to see a higher emotional loyalty, what follows is quite surprising. Next Clothing has a fairly high Emotional Loyalty indication, with 64% saying they feel proud to be a customer of Next. Equally so, Fat Face, another clothing retailer, has a score of 64%.
At the other end of our spectrum, we see that Tesco achieves a score of 54% on our Brand Loyalty Tracking Study, whereas Lidl, which appeals to those savvy shoppers, achieves a slightly higher score of 60%.
MEASURING THE UNCONSCIOUS LEVEL
We all know that EMOTIONS are at the heart of why we see shoppers giving Waitrose a higher score than, say, IKEA or M&S. Yet, emotions operate an an unconscious level that we are not able to easily articulate. This is where we believe consumer neuroscience can play a key role to help us access these unconscious emotional processes that are often hidden from other research tools.
One way we can do this is by using Reaction Time Testing. Accessing responses to stimuli in the context of the time the brain needs to produce an answer, this scalable solution can give you a new perspective, and a competitive edge, in revealing consumers’ hidden, implicit emotional reactions. This can help brands to understand the real drivers that consumers are looking for within a category, and help brands to understand how to position their brand against the competition.
ACHIEVING EMOTIONAL LOYALTY REQUIRES COMMITMENT TO THE CUSTOMER
Achieving true emotional loyalty all takes time and effort. Loyalty and membership schemes will help brands understand their customer better, but brands also need to get to know their customers through the many other channels available to them.
In conclusion, gaining and maintaining emotional loyalty is all encompassing: it covers the whole shopper journey from the first time a shopper shows interest in a product, to post purchase and beyond. Brands need to know their customer segments and what consumers want in terms of products, price, place and service and deliver what the consumer wants. Find out how to make your offer relevant and delightful to the different customer segments. Test ways to communicate this in a personalised, engaging, but subtle way and you are onto a winner.
Justine Boston is an Associate Director in the Retail Team at Marketing Sciences Unlimited.
*Figures quoted taken from MycustomerSubscribe