Can You Buy Customer Loyalty?

Loyalty, by definition, is the quality of being loyal, which refers to ‘giving or showing firm and constant support or allegiance to a person or institution.’ The main goals of a loyalty program are to first create a brand loyal customer and secondly reward that customer for exclusively buying from the brand. Are companies really getting the results they desire from these programs?

In a fast.Map study done in 2013, 20% of consumers said they would switch loyalties if offered a better loyalty program by a competitor. 33% of those surveyed use loyalty programs to try out and buy from brands they wouldn’t normally use and a full 96% of consumers would be tempted to switch allegiances to a competitor for a good price promotion.

There is an obvious flaw in the so called “loyalty program”. Contrary to the name, current systems like these do not create brand loyalty. What consumer doesn’t like free things? Customers are currently using rewards programs to obtain discounts and prizes for temporarily purchasing from a specific producer. Although history shows that loyalty can potentially be bought, examining what drives millennials reveals that it is much stronger when earned. Millennials will value companies that value and work for them. Making personalized, meaningful rewards programs that align causes or interests with customers earns not only respect, but loyalty as well. In a Bond Brand Loyalty (formerly Martiz Loyalty Marketing) study 39% of millennials said they would not be exclusively loyal to a company that does not have a strong rewards program.

What are fundamental aspects of loyalty? Doing what you say you will, showing up regularly, admitting when you are wrong then apologizing, and finally always acting in the best interests of the people whose respect you are trying to earn. These are all qualities that all consumers desire, and ultimately lead to the transparency of a company, earning consumer trust. To earn unfailing brand loyalty from today’s consumers, a foundation of mutual trust must first be built, turning a brand into a relationship brand instead of a temporary choice.

 

With contributions by Kali Lantefield

About

Brad is an expert in private label and challenger brand food marketing for Barkley, an integrated marketing and advertising agency. He specializes in working with manufacturing-driven food companies that have aspirations to develop a consumer insight-led strategies to help drive innovation and growth.

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