January 19, 2016
Brand loyalty has been held up as one of the most important goals for marketers. Is brand loyalty really all its cracked up to be? Maybe, maybe not. But it is an important thing for all brands to think about. Here are five interesting statistics about brand loyalty.
The statistic: 80% of your company’s future revenue will come from 20% of your current customers.
You’ve probably heard this statistic many times before. Here’s a similar statistic showing the value of brand loyalty: Up to 15% of a business’s most loyal customers account for 55-70% of its total sales, according to research done at the Kellogg School of Management at Northwestern University. Here’s another statistic from Bain & Company: Returning customers typically spend 67% more than first time customers.
What it means: This is why brand loyalty has traditionally mattered a great deal to companies. You don’t have to spend any money to recruit existing customers, and they’ll make big contributions to your company’s income over time.
The statistic: 25% of Millennials say brand loyalty drives purchasing decisions.
Here’s a contradiction if there ever was one. On the one hand, decades worth of conventional wisdom says that brand loyalty is vitally important. On the other hand, Millennials may not be as loyal to brands as their parents. A study of Millennials discussed in Forbes showed that this demographic group is much more interested in factors like price than plain old brand loyalty. As they become more of a driving force in the economy, brands need to keep that in mind.
What it means: If Millennials are your audience, you need to find ways to keep their patronage besides simply brand loyalty. So how do you make them customers for life? As the following statistics from NewsCred’s The Millennial Mind: How Content Drives Brand Loyalty demonstrate, it’s important to stay in touch with them through various means.
- 62% of Millennials feel that online content drives their loyalty to a brand. If you want to gain brand loyalty from Millennials, it’s important to use social media and use it wisely.
- The most important driver of brand loyalty for Millennials is a great product at 77%. That’s followed closely by brand recognition and trust at 69%.
Experiential marketing is one way to build brand recognition and trust. If you can attach a positive emotion to your brand, or appeal to people’s senses with your product or service, it does a lot to cement a good association with your brand in consumers’ minds.
The statistic: 87% of consumers who interacted with a company daily feel loyal to that company.
This infographic from Strativity shows that how frequently you interact with consumers really does matter. Contrast that 87% with these numbers: 64% of consumers who interacted with a brand weekly felt loyal to it. Forty-nine percent of consumers who were in touch monthly and 33% of consumers who interacted only a few times a year felt loyal to a brand.
What it means: Take every opportunity to connect with consumers and deliver something of value to them. Come up with an effective strategy for using email marketing, social media, print marketing and other forms of outreach. Drive consumers into your stores or to your website as much as possible. Plan special consumer appreciation or experiential marketing events to bring them to you and make them feel valued.
The statistic: 58% of people buy from the stores and brands whose loyalty programs they belong to at least once a month
This statistic (which we found on a blog post by CityGro) comes as no big surprise. If you want to keep customers loyal, why not offer a loyalty program? By giving consumers rewards when they buy products and services from you, you’re more likely to ensure they stay loyal to your brand. Nearly half of all retailers (46%, according to a statistic on this website) say that loyalty programs are the best way of increasing sales.
What it means: If you don’t offer a loyalty program, think about adding one. If you do offer a loyalty program, consider ways you can ramp it up. A better loyalty program gives consumers a better incentive to shop with you.
Increasing the rewards offered by your loyalty program doesn’t have to cost you anything. Consumers want to save money, but they also want to feel connected to brands. Can you do a better job of asking your loyalty members for feedback or ideas on how to improve your products and services? Can you do more to reach out to them on social media? Can you engage with them more often – perhaps by sending an e-birthday card or nice note on the anniversary of the day they signed up for your loyalty program? If you use experiential marketing, can you plan a special event just for your loyalty program members?
The statistic: 57% of small business owners say that having a relationship with their consumers is the primary driver of repeat business.
As much as consumers sometimes love the anonymity and convenience of big box stores, they also want the familiarity and knowledgeable staff that comes with shopping at a small business. After all, if you want really good information about home improvement or organic gardening products, where are you going to go: a national chain, or a locally-owned vendor? That’s what this statistic from Braun Research (via Access Development) means to me.
What it means: Just because you’re one of the big guys doesn’t mean you can’t have a great relationship with your customers. You may just have to work a little harder to make that personal connection.
This is another area where experiential marketing can be a big help. Experiential marketing is an opportunity for brand ambassadors to interact one-on-one with consumers and provide them with something of value. It’s a chance to put a human face on your company, and begin establishing a closer connection with consumers. It can help them feel like they have the personal relationship with businesses that they crave.