BJ Bueno

Loyal customers consistently do business with their preferred brands, often without evaluating convenience or pricing factors. These loyal customers are also more likely to tell their friends and family about the brand (called word of mouth), creating a low-cost stream of new customers.

Given these valuable attributes, it’s easy to understand why loyalty is considered the holy grail of marketing.

Loyalty Isn’t An Accident

Companies that foster brand loyalty go to great lengths to understand their customers’ needs and meet those needs better than anyone else.

These companies seek to create loyal customer evangelists, or what we call Brand Lovers. Creating Brand Lovers requires diligent effort on the part of executives to adopt a highly customer-centric approach to marketing, product development, and operations.

Cult Brands are those businesses that foster an unusual level of brand loyalty among their patrons. Apple Brand Lovers, for example, don’t consider a PC as a viable alternative.

Five Factors that Influence Loyalty to a Brand

Numerous factors and psychological processes are involved in influencing customers’ relationship with your brand:

1. Repeat Purchasing Behavior: How often does a customer buy from you?
2. Commitment: How long has a customer been committed to doing business with you?
3. Perceived Value: How much value does a customer perceive in your offering?
4. Brand Trust: How much trust does a customer have in your brand?
5. Customer Satisfaction: How satisfied is a customer with the overall brand experience?

Four Types of Loyalty

Marketing professor Philip Kotler suggest four groups of customer types that demonstrate similar behavioral patterns in respect to brand loyalty:

1. Hard-core Loyals: Customers who buy exclusively from a brand.
2. Split Loyals: Customers loyal to two or three brands in a particular category.
3. Shifting Loyals: Customers who move from one brand to another.
4. Switchers: Customers with no sense of loyalty to any brand.^{1 2}

Three Customer Mindsets

There are three primary customer mindsets important to understanding the factors behind brand loyalty. Every customer engages in all of these behaviors at different points throughout their lives.

1. Transactional Mindset: Logic-driven thinking that weighs the options and makes the optimal decision in the moment.
2. Relational Mindset: Although logic still plays a role, feelings primarily drive purchasing decisions.
3. Loyal Mindset: Decisions are based on deeply-held values and ideals.

The Cult Branding Loyalty Continuum

Over nearly two decades at The Cult Branding Company, we have identified three primary patterns of behavior among customers:

1. Brand Lovers: Customers a brand is especially for; those customers who love the brand the most and who may not perceive any alternative to the brand’s offering. Brand Lovers have an emotional investment in the brand. They feel their values align with the brand’s.
2. Brand Enthusiasts: Customers who have a favorable impression of a brand but don’t necessarily have any investment or a deeper connection to the brand.
3. Brand Nomads: Customers with a transactional mindset (see above) who shift from brand to brand without forming any brand allegiances.

The Key to Building Brand Loyalty

The truth is that most businesses struggle to build brand loyalty.

In fact, many executives at large corporations don’t even believe that building brand loyalty is possible, opting instead to exclusively focus on driving the next transaction. In our experience working with major national brands as well as independent retailers, building brand loyalty is most certainly possible.

Of course, we have a lot of evidence for this claim. A quick look at Cult Brands highlights the extraordinary level of brand loyalty some businesses have achieved with their customers.

While not every business may want to go to the lengths it takes to transform into a Cult Brand, every business can cultivate a core group of loyal customers—their Brand Lovers.

Focusing on your Brand Lovers is the key to building brand loyalty.

The Psychology of Mass Movements

Brand loyalty becomes less elusive when you understand the various drivers of human behavior. You don’t need to be a psychologist to appreciate that we, as humans, aren’t always aware of why we do what we do.

It’s one thing to create a loyal customer; it’s another to foster brand communities where groups of people band together around your brand’s message.

When you see groups of people joining a brand’s mission, you see a Cult Brand in action. How does it happen? And what can you do to help your brand build a following of loyal customers?

Using Apple as an ideal example, take a look at how you can create a mass movement:

Onward

If you’re looking to further your knowledge on brand loyalty and how to cultivate it for your business, here’s a hand-picked selection of related articles:

• The Seven Golden Rules of Cult Branding
• How to Build Customer Loyalty in The Age of Skeptics
• How to Start a Cult … Brand
• A Proven Method to Find Brand Lovers
• Eight Steps to Building Brand Loyalty
• What Smart Marketers Can Learn From Customer Tattoos
• How Cult Brands Create Magical Experiences for Customers
• Beyond Brand Loyalty Programs: 5 Ways to Create Loyal Customers

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He’s in, he’s out – Elon Musk’s decision whether or not to purchase Twitter has dominated headlines for weeks. While there’s been a lot of talk about free speech and financial shenanigans, the largest part of the discourse has been around bots. Musk raised the question of how many Twitter users are actually genuine people, and what’s happened since then?

People now trust Twitter less than they did before. This change in sentiment appears to be occurring independently of individual’s opinions of Musk. By not being able to address the bot question in a way that satisfied Musk – or, at a minimum, was understandable to the general public – Twitter left a lot of people with a lot of questions. While many of these questions are relevant to the health of discourse, there are additional huge concerns for brand building professionals. 

If there’s no accurate bot numbers, how reliable is Twitter’s CPM pricing?  Are the reports of a liberal, affluent user base believable? Do users really spend five hours a week on the platform? Doubts are like potato chips – you’re never going to have just one. 

Doubts destroy brands. 

Troll or Truth Teller: Understanding Elon Musk

Elon Musk understands better than most people that brands rise and fall based on how people feel about them. Tesla is a beautiful case in point. Tesla owners buy more than a car: they’re buying into a specific vision for the future, with the idea that they’re participants in progress offsetting the growing pains that come with any emerging technology. 

Given the sprawling and complex nature of Musk’s business finances, I can’t say with any degree of certainty that he ever intended to complete the Twitter purchase. But there seems to be little doubt that Musk wanted to damage Twitter’s value. He did this by tactically attacking Twitter’s trustworthiness – specifically by raising concerns about the bot issue. 

You have a budget to work with as you’re building a brand. How much of that money are you willing to devote to Twitter now? What Musk really did is shine a light on the tendency to accept platform performance claims without question. Prior to this, discussion of bot presence on Twitter was definitely happening in tech circles – but it wasn’t a mainstream discussion. Now that the question has been raised in such a prominent fashion, the wider business community has doubts. And that’s not good news for Twitter.

It Could Happen To You: We All Have Vulnerabilities

It’s easy to say that our brands would never be in the position Twitter is in, but in real life, almost every organization has some aspect of their operation they’d rather not talk about. Twitter’s experience serves as a wake-up call for leadership to think about what can be done ahead of time to address those situations. 

The choice to keep maintaining trustworthiness at the core of a brand’s decision-making impacts every facet of the organization, from operations to communications right on up through mergers and acquisitions. Twitter had every opportunity to handle this bot question differently, but they didn’t. We’re going to see how the brand moves forward in the days to come. 

I’m very interested to hear what you think about the situation. Did Elon make the right move? Will Twitter emerge triumphant after all? Let me know what you think.

Setting the right prices for your audience and revenue goals is important when taking a product to market. The following questions will help you clarify your pricing model.

To develop your pricing model, consider:

• What is the value you’re offering to your target customers?
• Are there existing price expectations?
• How do you price your product relative to your competitors?
• Is there a way to create a competitive advantage with your pricing model?

Channel economics is important to consider. For example, most airlines, like JetBlue, charge a $25 booking fee when you book a flight over the phone while charging no fees for online booking. There is little variable cost for web transactions, but call center representatives are expensive.

Your goal might be to develop a revenue model based on anticipated market penetration, average transaction size, number of transactions, and so on.

Consider:

• What are your primary goals for market share penetration?
• What are your estimated margins over the next one-, two-, and three-year horizon, factoring in startup and ongoing expenses?
• What are the human resources requirements for the first year of execution?

To help mitigate risk, it is advisable to identify the economic, competitive, and internal risks associated with executing this strategy. Outline the biggest risks that may affect your ability to reach your goals and develop strategies to address how to overcome them.

Choosing the correct channels can help your organization expand its offerings reach and revenue. You might include your retail store, Internet, a customer service call center, face-to-face salesperson, a trade show, a seminar, or a direct partner. Having a strong foundation in your channels can give your marketing an edge.

Amazon.com’s primary channel is its website. Walmart’s primary channel is its retail chain. BWM’s primary channel is its dealerships. AT&T’s channels include its authorized dealers (partners), independent retail stores, and website.

Your goal isn’t just to identify your channels but to ensure that each channel is as seamlessly integrated with each other as possible.

Customers should have a consistent brand experience no matter what channel or touch point through which they interact with you.

The key questions in your channel analysis are:

• Where do you reach your target customers?
• Where do your target customers buy?
• Where will you promote your products?
• What is the right distribution model?
• How do you develop the right distribution channels?
• Does the channel fit your offering?
• How does your offering fit with your target markets and channels?
• How would customers desire to interact with you?
• What level of interaction do your target customers require?
• Can you create a competitive advantage?

You want to make sure your offering fits your channel. For example, it is difficult to sell complex services or certain high-priced products over the web.

When our clients want to build best-in-class plans they bring together their smartest folks and the relevant information. These questions are perfect to discuss offsite with your leadership team and relevant data. Try setting aside time for your leadership team to discuss and prioritize your channel strategies for 2022 and beyond.

Understanding your product’s key features and benefits is the first step in defining your product’s unique value proposition. You must understand exactly how your product connects with your customers: the context of their use, the solutions it solves, and the benefits they derive.

Here are some key questions to bring clarity to your offering:

• What needs or tensions do your target customers need solved?
• Which features in your offering best address these needs?
• How will customers use it?
• What are important attributes or benefits of your offering?
• How is your offering differentiated in the marketplace?

To help determine the product’s unique value proposition, put yourself in your target customer’s perspective when you think about presenting your company’s offering. Consider:

• What do you want your customers to think?
• What do you want them to feel?
• What do you want them to believe?
• What do you want them to remember?

The better insights you have about your customers, the more effective you can be at defining your offering. This means you need to get to know your customers, to obsess about your customers.

Talk to them, listen to them, and get to know them. Defining your offering will also help you create more effective marketing messages.