Brand loyalty is the tendency of a consumer to continue buying the same brand of goods rather than competing brands. It is also defined as positive feelings towards a brand and a dedication to purchase the same product or service repeatedly from the same brand, regardless of a competitor’s actions or changes in the environment.
You must have heard that it is cheaper to keep an existing customer than acquire a new one – leading companies realize just how much customer retention can impact the bottom line. According to research from Bain & Co and Earl Sasser of Harvard Business School, increasing customer retention rates by just 5% can boost profits by 25% to 95%. Not bad, right?
Brand loyalty use to be every marketers holy grail. The problem now is thanks the internet consumers have access to businesses all over the world and now have more choices than ever before. The truth is brand loyalty is dying and it is getting increasingly difficult to retain customers. Customers now require a deeper level on connection to remain loyal to your brand.
Gone are the days when children bought the same products their parents bought growing up or consumers would simple find a brand that catered to their needs – like Ariel For laundry, Golden Morn as a breakfast meal or Pampers as diapers and stick to it barring any unreasonable price increase or reduction in quality.
The Rise Of Customer Relationship – Customer Relations Is growing more important than ever
Customer relationship refers to the different practices, strategies, and guidelines used to manage a company’s customer interactions. The goal is to analyze and make informed decisions that improve the overall customer experience. In the words of Mercedes Benz USA President and CEO Steve Cannon “Customer experience,” he says in Loyalty360, “is the new marketing”
Customer relationship is growing more and more important for brands to build. An analysis of British brands bought by Markables, a trademark valuation firm found that while the proportion of a transaction attributed to brand value was 25% in 2005 this had decreased to just 13% in 2014. Over the same period the value of customer relations increased from 12% to 24%, overtaking the role of brands in acquisitions.
Further research also pointed out that 24% of customers continue to seek out brands two or more years after a good customer experience & 39% continue to avoid brands two or more years after a bad experience.
The modern customer would take any opportunity you give them to take their spending money elsewhere. 68% of customers would switch companies because of poor customer relationship and 89% of customers would switch brands twice a year because of poor customer relationship. The importance of robust customer relations strategy becomes more important than ever.
What this means is that it has become very important that top-notch customer experience is provided at every customer touch point. The new generation of customers are empowered, they demand personal and engaging experiences every time they interact with your brand.
There has been a change in the philosophy of buying among customer, and it has become paramount that brands invest more on building strong customer relationships, don’t be the big brand stuck in old ways. Today’s customers are less loyal that before, so its important you understand your customer’s journey and develop a customer relationship strategy to be prepared for the peaks and valleys that affect buying decisions.