BRAND LOYALTY

Brand loyalty is where a person buys products from the same manufacturer repeatedly rather than from other suppliers.When consumers become committed to a brand and make repeat purchases over time. 


Brand loyalty is a result of consumer behaviour and is affected by a person's preferences. Loyal customers will consistently purchase products from their preferred brands, regardless of convenience or price. 

Companies will often use different marketing strategies to cultivate loyal customers, be it is through loyalty programs (i.e. rewards programs) or trials and incentives (ex. samples and free gifts).

Companies that successfully cultivate loyal customers also develop brand ambassadors – consumers that will market a certain brand and talk positively about it among their friends. This is free word-of-mouth marketing for the company and is often very effective.


TYPES -


According to Philip Kotler there are 4 types of brand loyals -

  1. Hard-core Loyals - who buy the brand all the time.
  2. Split Loyals - loyal to two or three brands.
  3. Shifting Loyals - moving from one brand to another.
  4. Switchers - with no loyalty (possibly 'deal-prone', constantly looking for bargains or 'vanity prone', looking for something different). Again, research shows that customer commitment is a more nuanced a fine-grained construct than what was previously thought. Specifically, customer commitment has five dimensions, and some commitment dimensions (forced commitment may even negatively impact customer loyalty).




BUILDING BRAND LOYALTY

1. Keep quality high. 
  • Depending on the price of the product there is an expectation of a certain level of quality from the marketplace. 
  • Stay consistent in the quality of goods or services. Else people will go back to what they know they can count on, don’t let them down.

2. Engage customers.
  • Keep in touch with your target market on a frequent and consistent basis.
  • Let the customers know about the new and exciting developments within the company and what to expect next, build momentum through communication and let them feel involved in the happenings of the company.

3. Focus on your best customers

  • Building business around the best customer called Brand Lovers—instead of trying to aimlessly drive sales. 
  • Over time, return on marketing and innovation efforts will rise. 
  • Apple is masterful at creating products especially for customers who love style, creativity, and simplicity.

4. Offering returning customers a discount on services.

  • Everyone loves a good deal. Therefore, when a customer returns to a company, it is a good idea to reward them for coming back. 
  • It can be a huge discount; or can just be a percentage off of their bill. However, simply acknowledging and to appreciate their business and are thankful they are coming back is a great way to encourage loyalty.

5. Giving rewards for references.

  • Giving current customers rewards for referring other customers is yet another way to show current customers to appreciate their business. It also helps build up customer database quickly. 

6. Offering updates. 
  • A company can post updates on Facebook or Twitter page, about their business. 
  • This will make customers feel like they know the company well. 
  • They will have the inside scoop, a behind-the-scenes look at what company is dealing with on any given day. 
  • As a result, business suddenly become more human to them. This is important because appearing as a human in their eyes instead of a big, cold, heartless company is key to relationship building. Consequently, it’s crucial to personal branding as well. Updating your social-media accounts or website is a great way to create brand loyalty.

MEASURING BRAND LOYALTY

1. PURCHASE BEHAVIOUR PATTERNS
  • Consumer behaviour captures all the aspect of purchase, utility and disposal of products and services. In groups and organization are considered within the framework of consumer. Failing to understand consumer behaviour is the recipe for disaster as some companies have found it the hard way. 
  • For example, Wal-Mart launched operations in Latin-America with store design replicating that of US markets. However, Latin America consumer differs to US consumer in every aspect. Wal-Mart suffered consequences and failed to create impact.
  • Social, cultural, individual and emotional forces play a big part in defining consumer buying behaviour. 
  • Consumer buying behaviour is influenced by individual’s own personality traits. These personality traits do not remain the same but change with the life cycle. 
  • The choice of occupation and corresponding income level also play part in determining consumer behaviour.
  • A doctor and software engineer both would have different buying pattern in apparel, food automobile etc. 
  • Consumers from similar background, occupation and income levels may show a different lifestyle pattern.
  • An individual buying behaviour is influenced by motivation, perception, learning, beliefs and attitude. These factors affect consumer at a psychological level and determine her overall buying behaviour. 
  • Maslow’s hierarchy, Herzberg Theory and Freud Theory try and explain people different motivational level in undertaking a buying decision. Perception is what consumer understands about a product through their senses. 
2. SWITCHING COST ANALYSIS
  • The negative costs that a consumer incurs as a result of changing suppliers, brands or products. 
  • Although most prevalent switching costs are monetary in nature, there are also psychological, effort- and time-based switching costs.
  • Switching costs are incremental expenditures, inconveniences, and risks incurred when a customer changes from one supplier to another. 
  • Sustainable companies usually try to employ strategies that incur some sort of high cost in order to dissuade customers from switching to a competitor's product, brand or services. 
  • For example, many cellular phone carriers charge very high cancellation fees for canceling a contract. Cell phone carriers do this in hopes that the costs involved with switching to another carrier will be high enough to prevent their customers from doing so.


3. SATISFACTION MEASUREMENT

  • A satisfied customer is one who will continue to buy from you, seldom shop around, refer other customers and in general be a superstar advocate for the business.

  • The customer satisfaction can be measured by : Perceived quality, Loyalty ,Attributional satisfaction and Intention to repurchase.


EXAMPLE - BRAND LOYALTY

JET PRIVILEGES BY JET AIRWAYS
•Objective: Ensuring stickiness of every customer who boards a Jet Flight.

•Eligibility: Any customer who has flied once on a Jet flight can register in the program.

•Modalities: The program revolves around five tiers, with increasing Privileges. Tier upgrade and retention done through unique multi-criteria based DTR System, which allows JP to periodically review its best customers & move them up.
•Results:
In its first year of inception, JP Miles has been awarded the Freddie Global Awards 2005 for its unique DTR system