A consumer who develops brand loyalty begins to find a positive appeal towards a particular brand and develops a certain trust in that brand. This causes the consumer to choose to make repeated purchases of the brand whenever a product of that brand’s category is required (Holt).
In order for any business to establish, it is essential for the business to ensure that it establishes a relationship with its consumers that compels its consumers to make repeated purchases of the same brand. This causes the business to earn revenue out of repeated business to the same set of consumers. An example of the significance of this fact can be found in the fact that marketers have attributed the implications of brand loyalty to be similar to those observed as a product of the Pareto Principle. It would not be unjustified to concur that eighty percent of the sales that a brand undergoes are because of the twenty percent consumers who make repeated purchases of the brand (Keiningham, Vavra and Aksoy).
It is for the same reason that businesses are beginning to concentrate on customer retention programs rather than on customer acquisition programs. Measures taken in this regard can also be seen in the increased degree of development in the area of Customer Relationship Management that pertains to the acquisition of current customers and the tailoring of the products and services of the business in order to ensure that loyal customers remain to be so (Dyché).
In order to develop brand loyalty, it is essential for a business to exist in a manner such that it generates a strong sense of goodwill internally as well as externally. In order for the business to communicate a sound product’s attributes to the consumer and to convince the consumer of the authenticity and high degree of utility of the product/service, the consumer cannot be expected to develop an interest in the product/service at all much less loyalty (Durkin). It is perhaps because of the same reason that measures to develop brand loyalty can be observed to be in action at the state shopping mall as well as at the neighborhood grocers.
Brand loyalty incorporates a significant amount of communication on the part of the vendor and it is because of the same reason that the vendor chooses to not only provide the consumer with the actual product but more than often chooses to draw the customer in through the lure of the augmented product (Kotler). New businesses are entering the arena every day and are launching their customer acquisition strategies as they do so. In light of this fact, it has become all the more significant for present businesses to launch customer retention strategies that they can rely upon to keep their customers coming back to them instead of opting to try out the competitor’s product/service.
The cost of acquiring new consumers has risen because of the length of the process and the immense amount of time and resources that are required in it. Instead, businesses have begun to concentrate their time and effort on the retention of already present consumers since it allows them to save up on the extra push that would otherwise be required in launching customers acquisition strategies and starting from scratch. The modern day consumer has become increasingly conscious of his choices, preferences, likes and dislikes and the fact that he is greeted by a vast array of options to choose from only serves to add to the volatility of the scenario.
At this point, it is essential to realize that there are different levels of loyalty that exist amongst consumers towards a brand. The first level is that of Habitual Loyalty. Consumers who can be classified to exercise Habitual Loyalty are ones who choose to buy a brand because of the mere reason that they are used to it and have become familiar with what to expect and what not to expect from that particular brand (Lundy). The second level is that of Locked-in Loyalty.
Consumers who can be classified in this category are ones who remain loyal to a brand because they have established a significant part of their lifestyle based on that brands features. For instance, a consumer who has been using a particular cellular service provider at a time when he opened his business will choose remain loyal to the same cellular service provider a few years into his business if he has made some of the features provided by the cellular service an everyday part of his business.
To consumers who can be categorized to be exercising Locked-in Loyalty, the barriers that exist in changing from one brand to another are too high as they loom in the form of potential losses in terms of utility or even monetary significance. The next level is one that can be referred to as Golden Handcuffs.
Consumers who belong to this level are ones who can be found commonly in consumers who make use of frequent flyer cards or similar loyalty cards. In cases such as these, the consumer runs the risk of foregoing the additional advantage that he/she has in purchasing one brand in the form of points that can be redeemed from the supplier. Before we proceed to the fourth level of loyalty, it is essential to note that these three levels of loyalty are ones in which the consumer may be engaged unwillingly in certain scenarios and can therefore be expected to switch brands at the first feasible opportunity possible. The fourth level of brand loyalty however, is one that is referred to as Advocacy.
A consumer who becomes an advocate of a brand is one that can be expected to be truly loyal to a brand. The advocate will not only defend the brand if required but will also refer prospective consumers to use the same brand and to try it. The advocate remains loyal to the subject brand and participates in any activities that he/she can that pertain to the brand. A consumer who can be classified to be an advocate for a brand can be expected to remain truly loyal to brand and will only switch from the subject brand under the most extreme of circumstances.
The element that sets the advocate apart from the consumers who can be classified to belong to the three levels of brand loyalty discussed earlier in the paper is that while the consumers who belong to habitual loyalty, locked in loyalty and golden handcuffs may be loyal, they keep their loyalty to the brand a matter that they are not entirely proud of and at times, not entirely satisfied with either.
The advocate on the other hand, not only chooses to be satisfied with the subject brand, but also serves as a marketer for the brand by promoting the brand wherever the opportunity to do so comes by. Examples of consumers who can be classified to belong to this category can be found in Volkswagen fans that choose to go so far as to keep the same car as their primary car through their entire lives.
We can, therefore, concur that in terms of modern day marketing, brand loyalty has evolved to become one of the leading elements that brand managers strive to develop and maintain. We can also concur that a brand that is appreciated by consumers but does not manage to develop a significant degree of loyalty amongst consumers cannot be expected to last for long in the market since unless consumers are given a reason to switch from the external brand to the subject brand and become loyal to it, they will not do so and even though they will find the subject brand to be credible, they will remain loyal to their initial brand out of either one of the four levels of brand loyalty that have been elaborated upon above.
The business world is one which new contestants are stepping into every day and the world of marketing is evolving rapidly as each new business brings with it a new customer acquisition and/or customer retention strategy. In light of this fact, we can conclude that it has become all the more essential for formerly present businesses to maintain their clientele if they are to survive the wave after wave of emerging competitors.
Durkin, Dianne M. The Loyalty Advantage: Essential Steps to Energize Your Company, Your Customers, your Brand. New York: AMACOM Div American Mgmt Assn, 2005.
Dyché, Jill. The CRM Handbook: a Business Guide to Customer Relationship Management. New York: Addison-Wesley, 2001.
Holt, Douglas B. How Brands Become Icons: the Principles of Cultural Branding. Boston: Harvard Business Press, 2004.
Keiningham, Timothy L., et al. Loyalty Myths: Hyped Strategies that Will Put You Out of Business– and Proven Tactics that Really Work. Hoboken: John Wiley and Sons, 2005.
Kotler, Philip. Marketing Management: Analysis, Planning, Implementation, and Control. New Jersey: Prentice-Hall, 1988.
Lundy, Guy. Customer Loyalty: True love is Hard to Find. 2006. Web.