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Why is Brand Loyalty Important? A Guide for New Businesses

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why is brand loyalty important

In a world where every company is up-leveling its products and paying for ads, you may wonder, why is brand loyalty important? At its core, brand loyalty is exactly what it sounds like: a tendency for some customers to continue supporting a particular brand over others, especially after having a positive experience with the products and services of the brand in question.

And that’s why it’s important. If your customers aren’t loyal to you, you’ll struggle to be successful.

Perhaps the most obvious example of this in the modern era would be Apple, a company known for inspiring an almost fierce amount of loyalty among consumers. Even though companies like Samsung regularly release smartphones and other mobile devices with technical specifications that are objectively more advanced than the latest iPhone, millions of people still flock to Apple’s latest hardware—and are willing to pay a significant premium for doing so.

In that particular case, much of this relationship is built on the same basic factor: trust. Over the years, Apple has made a name for itself releasing products that “just work.” They’ve even underlined that point again and again in their marketing campaigns. 

The beauty of their brand is in the simplicity of their products and that is clearly something that consumers are interested in. They don’t necessarily want or even need the latest and greatest hardware, they just want a reliable device that’s going to serve them well, regardless of how they use it.

A small or even medium-sized business may be daunted by the idea of brand loyalty when looking at an example like this. Understandably so. But you don’t need to be a global technology giant to take create brand loyalty among your audience. 

Non-profits, for example, should absolutely prioritize building brand loyalty. In fact, it’s even more important for small businesses and nonprofits who may have a large number of competitors all operating within the same geographic area.

If you’re still wondering why brand loyalty matters and how you can start building it for yourself, consider a few important details first.

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The Power of Loyalty: Facts and Figures

By any metric, it’s overwhelmingly clear that brand loyalty is important for the long-term success of your brand. Let the data speak for itself.

  • Recent data from Brand Keys found that boosting brand loyalty among the average consumer just 7 percent can lead to an increase in lifetime profits per customer by as much as 85 percent.
  • The same Brand Keys data revealed that increasing loyalty by just 3 percent can lead to a 10% cost reduction as well.
  • Not only do 65 percent of consumers say that the quality of the customer service that a brand offers plays an important role in deciding where to make a purchase, but 57 percent of those respondents say they’d actually pay more for an item if they know that customer service will be up to par.
  • Hubspot reports that 93 percent of consumers say that they’re willing to make repeat purchases with a brand that they are loyal to.

Taken together, these statistics tell two important stories. It will always cost a brand more money to bring a new customer into the fold than it will to simply hang onto one of their existing satisfied ones. But, more importantly, the more satisfied that customer is, the more money they’ll spend, thus increasing revenues across the board. In the example of a non-profit, “revenue” might equate to charitable donations or other factors—making brand loyalty just as important.

The ripple effect of brand loyalty is also an important consideration. When one person has a satisfying experience that inspires loyalty, they’re far more likely to tell their friends, family members and other loved ones. HubSpot research indicated that 81 percent of customers now trust recommendations from friends and family members over those that come directly from companies.

One loyal customer can easily become two, which becomes five, which becomes ten, and so on and so forth. In this way, brand loyalty is powerful because it creates its own momentum, and under the right circumstances, that momentum can take you very, very far.

Building Brand Loyalty: What You Need to Know

By far, the number one way to start building brand loyalty is to never, under any circumstances, let your customers down. When you release a product or service that you say does X, Y and Z, what you’re really doing is making a promise. The minute you fail to live up to that promise is the minute people go looking for other places to spend their money.

Take my company, for example. When I founded Visme, I wanted to create a tool to help people communicate better, particularly in the fast-paced digital era that we’re now living in. To get people to buy into that value proposition, Visme had to become a one-stop shop that would meet their needs and exceed their expectations regardless of what they were trying to do.

For us, that meant Visme had to be more than just a graph maker. It also had to be an Infographic creator. It also had to be a flowchart creator. If someone wanted to focus on print marketing collateral instead of digital materials, it needed to enable that as well.

But the reason why we’ve been able to inspire so much brand loyalty over the years is because ultimately, Visme does exactly what we said it was going to do—which is exactly what our customers needed it to do. They spoke, and we listened, creating a mutually beneficial relationship for everyone involved.

If you really want to inspire brand loyalty among as many people as possible, you need to go out of your way to provide as much value as possible on a daily basis—not just sometimes. For retailers, this might mean starting a loyalty rewards program or sending out meaningful promotions to your most passionate customers.

For a non-profit, this might mean offering tours of your facilities or having unique traditions that all relate back to your larger goal as an organization. Anything that you can do to improve transparency is ultimately a step worth taking to that end.

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How to Bring Brand Loyalty to Life

To truly build brand loyalty and harness it to drive growth in your business, you have to know how to use it. While there are many unique ways to encourage brand loyalty, here are a few ideas that any business can execute, regardless of size or budget.

Get Intimate: Marketing for nonprofits and commercial organizations alike in the modern era is all about intimate, emotional connections. People want to feel like they’re your only customer, even if both of you know that isn’t exactly true. If you’re able to shine that proverbial spotlight on someone, even in a small way, they’re going to see something from your brand that they don’t see from anyone else’s. 

Leverage UGC: When it comes to content marketing, few tools are better at building brand loyalty than using UGC, User Generated Content. With UGC, you can feature customers on social media, your website and blog posts. Not only does this help you drive social proof for your brand, products and services, but it drives brand trust and helps you to further connect with customers. Check out our UGC guide to get started.

Give as much as you get: Reward customers who come back time and time again and give new customers a reason to do the same, using incentives and loyalty programs. 

Stay in touch: Always ask for feedback from your customers. Always be in communication with them, taking open and honest insights to heart. This can be used to improve your product while showing that you’re a brand that cares about the customers. This might mean being active on social media—some of the best brands on Twitter are the most engaged, like Wendy’s or Southwest Airlines—or simply sending regular value-based emails to customers.

So Why is Brand Loyalty Important?

When done right, brand loyalty ensures your customers see a piece of themselves in your brand, no matter how small that piece truly is. At that point, you have more than just another customer.

So, the answer to your question, why is brand loyalty important, is very simple: it provides you with an opportunity to build relationships that will carry your business further than your competitors. 

Payman Taei is the founder of Visme, an easy-to-use online tool to create engaging presentations, infographics, and other forms of visual content. He is also the founder of HindSite Interactive, an award-winning Maryland digital agency specializing in website design, user experience and web app development.

Why is Brand Loyalty Important? A Guide for New Businesses

By: Payman Taei Time to Read: 6 min