5 actions brands can take to unlock customer loyalty
1. When it comes to customer services—go above and beyond
One of the most important ways brands can build customer loyalty is to provide exceptional customer service. When customers have a positive experience with your brand, they are more likely to return and recommend your products or services. Our recent research indicates that 75% of consumers are likely to buy a product from a brand that shares their values, and 68% report that it is likely they would spend more money with aligned brands.
And since over half of customers notice a company’s values in action via direct experiences (52%), enabling your customer service teams to engage in a well-trained, responsive, and friendly way is critical. Brands must go beyond transactional and surface-level interactions to demonstrate that they value their consumers. What can you do to foster and create that coveted brand loyalty? It starts with being intentional with how you show up for your customers to make sure they feel seen, heard, valued, and good about choosing your brand.
However, customer loyalty is not built and sustained only by providing excellent face-to-face interactions. With the rise of digital channels, customer service includes a spectrum of interactions through email, chatbots, social media, and other digital platforms. Customer relationship management (CRM) software also serves a vital role in the customer experience, enabling businesses to track customer interactions, preferences, and behaviors. Think holistically across every channel to set your brand apart in a crowded, competitive landscape.
2. Evoke trust with transparency and authenticity
Customers are more likely to be loyal to a brand they trust. To build trust, you need to be transparent with your customers. Be honest about your products, services, and pricing. If there is a problem or issue, be upfront and open about how you intend to address it. These practices also demonstrate authenticity, which matters to 57% of consumers, so it is vital that brands get this right. Communication is also key, so reach out to customers regularly and listen to their feedback. But don’t stop there: Make sure customers see your brand utilizing their feedback by incorporating it into your future actions.
We found that 61% of customers expect a company to be honest and transparent in communicating their values. Patagonia, a company specializing in clothing and gear for outdoor enthusiasts, does this well. The brand is transparent with consumers about its supply chain and environmental impact. It even encourages customers to buy used clothing and offers free product repairs. This transparency helped Patagonia build a loyal customer base with a deep connection to the brand based on shared values of sustainability and social responsibility.
3. Create personalized experiences driven by data
Brands can also build customer loyalty by creating personalized experiences. Utilize data and analytics to understand your customers' needs and preferences. Then, apply those insights to personalize communications, offers, and recommendations. Customers appreciate brands that understand their unique needs and preferences and cater to them.
Consumers, who express a preference and don’t see the brand acting on that knowledge, often feel unvalued. So, it’s crucial that your brand follows through on any stated personalization. Trust (89%) and reliability (89%) are important in creating emotional loyalty between consumers and their chosen brands. Following through on personalization demonstrates that your brand is trustworthy, helps customers feel seen, and shows they can rely on you to offer them relevant products and services.
However, it's important that companies are aware of the potential pitfalls and risks of personalization and leverage it strategically. Brands should avoid over-personalization when efforts go too far and feel intrusive to customers. If a company reveals personal information or overly specific details in marketing communications, customers may feel violated which can lead to a loss of trust.
It is also important to refrain from personalization tactics that might lead to a "filter bubble" effect. This happens when customers only see content and recommendations that reinforce their existing beliefs and preferences, and it limits a customer's exposure to new ideas and products—ultimately harming their experience with the brand.
4. Lean into rewards and incentives—but don’t solely rely on them
Rewards and incentives can be powerful tools to build customer loyalty, especially through formalized loyalty programs that reward customers for repeat purchases, referring friends and family, and other actions that deepen their relationship with the brand beyond transactions. The perceived value of loyalty programs is increasing and becoming an expectation for consumers. With 46% of customers saying a brand’s loyalty program has increased in importance for them over the past few years as a reason for purchasing a product, it’s clear that loyalty programs continue to be an important strategy for brands. Through these programs, brands can strategically leverage exclusive discounts, early access to new products or services, and other perks to keep customers engaged and excited about the brand.
But implementing a reward or loyalty program without the proper analytics framework and strategic foundation can lead brands to offer too many rewards and incentives. Customers may come to expect them, feel entitled to them, and devalue them, rather than see them as a special perk, leading to less loyal customers who feel like they're not rewarded enough. Over-rewarding customers can also be costly for the business and leads to decreased profitability.
Instead, brands should use a balanced and targeted approach to rewards and incentives focused on recognizing the most loyal customers who provide the greatest value to the business. Use discount offers wisely and evaluate how different loyalty and reward structures will affect customer interaction and incremental behavior. This can be critical to understanding how different benefits will impact the overall program before rolling them out.
5. Continuously improve products and services
Finally, to sustain customer loyalty, your brand must continuously improve the products and services you offer. Listen to customer feedback and use it to improve and keep up with industry trends and innovations to stay ahead of the competition. When customers see your brand evolve and improve, they are more likely to remain loyal in the long run.
Don’t forget the importance of aligning improvements with real consumer needs identified through analytics and research. Analytics can provide valuable insights into consumer behavior and preferences. Insights gained through customer data analysis from sources such as sales trends, website traffic, and social media engagement can help brands identify areas for improvement and potential opportunities for new products or services. For example, if data shows that customers frequently return a certain product, it may indicate a need for improvement.
Consumer trends analysis and research, such as customer surveys and focus groups, can also provide valuable feedback on needs and preferences. This feedback can inform future product and service improvements that meet real consumer needs. But not all feedback should be acted on. It’s important to prioritize feedback and consider the feasibility and cost of implementing improvements to ensure they align with your brand’s overall strategy and goals.
To succeed in today’s competitive landscape, it is essential to build and maintain long-term customer relationships. Building customer loyalty requires constant attention and effort. A set-it-and-forget-it approach isn’t an option. Your brand must be agile and willing to adapt to changes in consumer needs and preferences and regularly evaluate the effectiveness of your loyalty-building strategies. Brands that follow these five strategies will differentiate themselves, foster deeper loyalty, cultivate a more resilient customer base, and drive sustained business growth.
