The 6 Reasons Why Brand Loyalty is King

consumer loyalty

Don’t Underestimate the Value of Brand Loyalty
Research in the US on brand loyalty has identified that more than 50% of consumers would pay a 20-25% premium for their favorite brand before price sensitivity would see them switch to another, competing brand. In some categories, a 5% increase in the number of loyal customers can equate to a 95% increase in profitability. That’s a serious ROI from and area of brand management that does not always get the respect it deserves.

In their book; ‘Building the Brand Driven Business’, authors Davis and Dunn list the six business benefits that brand loyalty deliver. When customers are loyal they:
01. Stop considering other brands,
02. Request/search for your brand by name,
03. Recommend your brand to others (word of mouth and word of mouse),
04. Wait longer and travel further for your brand,
05. Accept brand extensions more readily,
06. Are happy to/continue to pay a premium price.

In the current over-cluttered and hyper competitive marketplace, 80% of consumers are vulnerable to switching brands due to competitive offers. Equally concerning, fewer than 20% of consumers would be prepared to recommend a brand to others.

Beyond the proliferation of me-too loyalty programs, few brands are focusing on customer loyalty to the extent this research justifies. For many brands, consumer loyalty is a concept that isn’t measured. As the business truisms ‘What gets measured gets done’ suggests, those who don’t measure will most likely not include brand loyalty initiatives in their strategic planning, ROI assessments and KPIs. How many other activities do you invest your resources in that fall short of the potential delivered by increased brand loyalty?

Dave Ansett
David is the founder of Truly Deeply, a brand agency with 25 years experience working with brands to position them for growth. His deep expertise is in the creation of high engagement brands that attract the attention of their audience and stand out from their competitors. David has extensive experience working with corporate, retail, food & beverage and entrepreneurial clients. Find out more at…
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Pic courtesy Tanzeel Ur Rehman

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