Customer loyalty is alive and kicking

E-commerce is fickle. Online, consumers look at price and reviews, but not much else.

Does that mean brand loyalty is weaker than ever? Not at all, as any business with a subscription model knows. Customer loyalty is alive and kicking.

In fact, modern brands are reinventing loyalty, with smart, data-driven strategies and a KPI that every investor keeps one eye on: CLTV.

From transaction to relationship

Consumers are less loyal than ever… unless you manage to build a genuine relationship. Branding remains as important as ever here. Research by McKinsey shows that 70% of consumers are willing to pay more for brands that offer personal value.

That goes a lot further than product or price. It's about shared beliefs, status and image.

Examples:

• Patagonia builds loyalty through values such as sustainability and activism, rather than discounts
• Tesla has never run a single paid marketing campaign, on the principle that the products speak for themselves
• Spotify creates connections with Wrapped: every year, playlists are shared en masse

Questions you can ask yourself as a brand:

• Do I solve a problem or offer added value that goes beyond my product alone?
• What added value do I offer that competitors don't, such as shared values, status, image or insight?

Community as the foundation for loyalty

One of the strongest forms of modern loyalty doesn't arise between brand and individual, but within a community. When customers feel part of something bigger, the bond becomes stronger and more lasting. Communities offer room for interaction, recognition and sharing experiences. The human elements that traditional marketing cannot match.

Examples:

• Nike strengthens brand loyalty with platforms such as Nike Run Club, where athletes motivate each other and share successes.
• LEGO actively involves customers in product development: fans can submit their own designs and vote for favourites.

By making room for co-creation and peer-to-peer interaction, you anchor loyalty at a deeper level than discounts ever could.

Service and experience

We see it a lot in marketing ourselves: when services or products start to look alike, the human experience makes all the difference.

A brand that excels in knowledge and service creates loyalty without the customer consciously thinking about it. Consumers value expertise and a soft touch. If the experience is good, they won't always remember the price they paid, but they do remember how smoothly the delivery went or the way an employee solved their problem.

Examples:

• Coolblue scores with its promise “anything for a smile” and invests heavily in delivery, installation and customer service
• Apple keeps customers on board with a closed ecosystem and highly accessible support at the Genius Bar

Every positive experience strengthens the relationship and makes it harder to switch to a competitor.

Lifetime value

In the world of KPIs, we have evolved: from gambling on outdoor advertising to counting impressions (display). Since conversion tracking, website actions (such as sign-ups and contact requests) can be measured too. And by now, all available customer data can even be fed back into external systems to personalise and improve campaigns.

This lets you see directly how much revenue a marketing component generates, and therefore whether it is being used efficiently. Which brings us to the most important KPI of a campaign: the value of a customer over their entire relationship with you, in other words customer lifetime value.

Examples:

• Acquisition campaigns optimised directly towards the customers who stay members the longest
• Customer reactivation with e-mail campaigns, based on churn signals

In this way, campaigns today focus not only on winning new customers, but even on optimising how long they stay. In everyday marketing speak, we also call this customer loyalty.

Conclusion

Loyalty is no longer about holding on to customers, but about staying relevant. Brands that handle data transparently, offer personalised interactions, build communities and excel in service create the strongest bond with their audience.

The question is no longer: How do I get more customers?
But: How do I become indispensable to the customers I already have?