Three Levels Of Brand Loyalty

What would your business be without its customers? The people who buy from you, whether you offer them a product or service, are really what keeps your business alive. Unfortunately, brand loyalty is something that many companies overlook. When you don’t focus on customer loyalty, you must constantly implement strategies to bring in new customers. This can be costly compared to relying on loyal customers to continue utilizing your services. 

What would your business be without its customers? In this post, we’ll consider how brand loyalty affects your business and the three levels you should be aware.

Why Should You Value Retention Of Customers?

Your customers are what bring in funds for your business and help you turn a profit. Sure, it’s good to get new customers as you set up sales funnels and promote your services or goods. On the other hand, acquiring a new customer costs more than having a loyal customer who returns to your business.

One study found that it costs about 500% more to get new customers to buy from brands than a loyal customer who continues using your service or buying products from you.

Customers who prefer one brand contribute to the company’s profitability. Your loyal customers buy from you, and when they need something you offer, they revisit your store. 

This can account for grocery stores, online shops, contractors, and more.

Research also shows that loyal customers offer about ten times better value to your business compared to the very first purchase they made.

By retaining customers, you also get an opportunity to learn more about your target audience. The most loyal customer will offer valuable data about who you should ideally target in the marketing strategies you develop.

The Stages Of Brand Loyalty

You understand the value of a loyal customer, but do you know about the three stages of brand loyalty? There are three levels of loyalty that you should familiarize yourself with – as each of these plays a vital role in businesses. The success of your business relies on getting customers to the third level of loyalty, sometimes called the holy grail by business leaders.

Let’s look at these three levels or stages of brand loyalty and how each affects your business and the customer.

Level 1: Awareness – The Change To Create A Loyal Customer

It all starts with awareness. This is the very first level and the point where you need to build trust and a relationship with the customer. Regarding the different stages, awareness is a make-or-break point – if you fail to impress and build loyalty here, the customer will look for competitors who can give them a better experience.

One mistake that many brands make is to think that loyalty is connected to price. Indeed, customers will often turn to a company that can offer them a good deal, but this isn’t all that customers are looking for.

How you approach a customer during the awareness phase will play a significant role.

One thing to keep in mind, however, is that some people prefer to refrain from expressing loyalty toward any brand. You need to be able to differentiate between different customers – and focus more on the ones that may develop loyalty. These are the ones that will add more value to your business in the long run.

A “no loyalty” customer does not care where they buy an item from as long as its price matches their willingness to pay.

A loyal customer usually shops around, looks at different marketing materials, and then decides based on their findings.

Level 2: Preference – A Sign of Customer Loyalty

Regardless of your business’s industry, it’s essential to understand level two’s role. At this stage, you create a loyal customer – but it’s also often simply due to a habit they form.

Perhaps your store is close to their workplace. This makes it convenient for the customer to pick up a few things before they head home. You may have deals that they are interested in regularly. Convenience is often the key behind level two, sometimes called the “Inertia stage.”

At this point, the customer may still think of your business as a generic brand. They make an association or feel an “attachment” to your store, but there is still room to build more loyalty between your company and the customer.

The critical factor to remember here is to show the customer why they choose you. Make sure they know how your business differs from the competitors. Asserting your brand as an expert in the specific industry is critical.

The good news is that you’ll find getting this type of customer to the next level easier than those who seem stuck at the first level of brand royalty.

Level 3: Insistence – Shopping From The Same Brand

When customers prefer a single brand for their purchases of something specific, and they are proud of it – this is when they enter level three – insistence. The sales team in companies will generally view these customers as the ones with the most value for the brand. You will often also create customized experiences for this type of customer, as many businesses find this adds some personality and helps to retain the customer at the insistence level.

If you successfully bring customers to this level, it’s easier to increase your profits without increasing your advertising expenses. It is the commitment that the customer has toward your brand that pays off in the long run.

With this said, it can be challenging to keep the customer coming back. Other retailers or stores can create competitive offers and use creative ways to win over your customers.

This is why you need to continue marketing toward new customers and your existing shoppers. After a successful transaction, you can spread your brand identity through word-of-mouth marketing. Another area where focusing on the satisfaction of people who shop at your business becomes beneficial.

It’s a good idea to start boosting the morale of your sales team. Business owners worldwide can agree that a motivated sales team and effective marketing are great for customer retention. Sales gamification is one way of doing this. Gamified elements can also be a great way to earn customer trust through loyalty programs and similar efforts.

The Bottom Line

You can achieve a lot by focusing on the satisfaction of your customers. Brand loyalty plays a significant role in the retention of customers for your company. A good strategy may retain customers, resulting in higher marketing costs due to the need for consistent promotional campaigns; once you recognize the importance of brand loyalty, use techniques that can cultivate better performance in your sales team. 
Spinify offers sales gamification software that can help amplify performance through game elements and rewards. Book a demo today to discover how gamification can amplify your team’s results.