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Consumers Move Between Brand Loyalty Stages

Identifying consumers as loyal or not is simplifying the complex stages involved in the customer journey.
Rakuten Marketing Insights released a new study titled, ‘What Makes People Love the Brands They Love,’ which provides an in-depth look at the current state of marketing, consumer loyalty behavior trends, brand applicability, and guidance to drive greater customer brand obsession, and key data and insights.

More than 1,500 consumers were surveyed about the reasons they do or do not engage with brands. The company analyzed and combined these responses with advertising performance data collected from approximately one million consumers who made more than 1.2 million purchase transactions. The study showed that brands who successfully connect with a consumer's core values are significantly more likely to set a foundation for brand fidelity, advocacy, evangelism and, ultimately, obsession.

Bridget Fletcher, vice president of marketing at Rakuten Marketing, talked to Loyalty360 about the key ramifications of this intriguing customer loyalty report.

What was your biggest takeaway from the report?
Fletcher: The biggest takeaway from our brand affinity research is that there is no “one-size-fits-all” way to define customer loyalty; the relationship between brands and consumers is much too complex. The point of our research was to show that it’s not as simple as identifying consumers as loyal or not loyal, but that consumers move between brand loyalty stages, and that their loyalty levels are driven by many different reasons.
For example, a consumer who is looking for a product that fits a specific need, like an accessory for a Halloween costume, is most likely to get online and find a brand that sells exactly what they need – loyalty or brand affinity isn’t likely to be a factor. This is a much different purchase motivator than someone who is in the market for a new pair of shoes or jeans, where product quality, comfort and fit are important factors. Consumers shopping for these items are much more likely to seek out the brands they already trust, or the brands to which they are already faithful or infatuated.

Understanding the different motivators for consumers to make individual purchases is important for advertisers to consider alongside loyalty factors, which is why it’s critical that advertisers don’t look at individual marketing metrics in and of themselves. They need to invest in an end-to-end view of consumer behavior, from discovery to purchase, that gives them an understanding of what is influencing both new and loyal customers so they can better customize their campaigns to both convert and nurture customer loyalty.  

What was your biggest surprise from the report?
Fletcher: That brand fidelity is elusive. Only 32 percent of consumers are 100 percent committed to a brand. Interestingly, a lot more consumers, 50 percent, say there is a brand they love enough to share with others. This means that fidelity and evangelism aren’t mutually exclusive.

Once a consumer reaches the highest form of loyalty, they wouldn’t switch to a competitor under any circumstance. The biggest factor that drives consumers to those highest levels of brand loyalty is how well the brand fits – how it fits their core values, their lifestyle, their look, and their personality. This was the most influential loyalty driver for 88 percent of consumers who took our survey. Critical to achieving brand loyalty is the brands’ ability to reflect the values and lifestyles of their customers. However, when the question is reversed to ask consumers how important it is that they identify with the brand’s core values, lifestyle or personality, most consumers responded, “not very.”

It’s a surprise, given that consumers are most likely to be loyal to brands that reflect their own priorities, that they aren’t more driven by how well they identify with the brand. What we found instead is, rather than a consumer needing to identify with a brand’s core values, the brand must identify with the consumers’ core values. The brand needs to reflect the consumers, rather than the consumer reflecting the brand.

Can you talk about the trends you see currently and foresee related to customer loyalty and consumer behavior?
Fletcher: Shoppers, even in a pinch, will look online first, despite time constraints. Our research found that 43 percent of consumers visit a digital marketplace before a physical location. This is reflective of the retail trends we’ve seen in 2017, as many brick-and-mortar locations close in favor of increasing digital marketing budgets. As consumers continue to move online, and incorporate their mobile devices into in-store shopping, the fluidity between online and offline channels is going to increase. Digital brand experiences will also need to fill the role that in-store customer service has traditionally played in shaping brand identities and influencing brand loyalty.

How do brands create authentic, meaningful relationships with customers?
Fletcher: Creating authentic, meaningful relationships is all about building a brand that is genuine. You can’t build consumer relationships without an emotional connection that comes from authenticity. A big part of this is applying the takeaway from our research that consumers must see their own priorities reflected in a brand before they’ll offer their affinity, trust, or fidelity.

There are lots of ways consumers interact with brands, both online and offline, through experiences, messaging, products and services. To appear genuine, brands must provide consistency in every interaction that consumers have with their brand, and in the quality and value they deliver to consumers. A lot of companies with great products fail because they don’t build that emotional connection.

What are loyalty marketers doing well and where do the challenges lie?
Fletcher: The marketers that are most effectively driving loyalty are investing in strategies that nurture a customer’s propensity to purchase again. Our research found that the number of purchases is directly correlated to increased purchase frequency, meaning that re-engaging consumers after the first purchase is critical – only 27 percent of first-time purchasers will purchase a second time, but 45 percent of two-time purchasers will purchase again, and 66 percent of those who have purchased five times will purchase again. Those first purchases are so crucial in creating a foundation for loyalty, and nurturing consumer relationships that are worth more to the brand.

Another strategy among brands that imbues loyalty is implementing programs that provide opportunities for engagement beyond just purchasing, and that also embody their mission and what they stand for. For example, Lululemon offers yoga classes in their stores. Kate Spade releases seasonal video vignettes. This creates a feeling of community around the brand, which is often further nurtured through influencer strategies. 

One of the challenges loyalty marketers face is creating authenticity through digital experiences. In many cases, online experiences can feel superficial when compared to the experiences consumers get in store. It is critical that marketers invest in data insights that give them a better understanding of what influences their consumers throughout the purchase journey, and that empower them to customize experiences based on those insights. This will let brands establish authenticity in their digital channels by showing that they know who their consumers are when they are reaching them online – treating them like people, like they would in the store. 

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