Brand Loyalty

Brand loyalty is the ultimate goal a company

sets for a branded product. In

previous articles, the definition and

importance of branded were discussed, as well as

necessary steps needed to brand a product. This

article focuses on brand loyalty, its importance to

a company, and steps necessary to convert to and

maintain brand loyalty.

What is Brand Loyalty?

Brand loyalty is a consumer’s preference to buy a

particular brand in a product category. It occurs

because consumers perceive that the brand offers

the right product features, images, or level of

quality at the right price. This perception becomes

the foundation for a new buying habit.

Basically, consumers initially will make a trial

purchase of the brand and, after satisfaction, tend

to form habits and continue purchasing the same

brand because the product is safe and familiar.

Brand loyalists have the following mindset:

• “I am committed to this brand.”

• “I am willing to pay a higher price for this

brand over other brands.”

• “I will recommend this brand to others.”

Why is Brand Loyalty Important to the

Bottom Line?

There are three main reasons why brand loyalty is

important:

• Higher Sales Volume The average United

States company loses half of its customers

every five years, equating to a 13% annual loss

of customers. This statistic illustrates the

challenges companies face when trying to

grow in competitive environments. Achieving

even 1% annual growth requires increasing

sales to customers, both existing and new, by

14%. Reducing customer loss can dramatically

improve business growth and brand loyalty,

which leads to consistent and even greater

sales since the same brand is purchased repeatedly.

• Premium Pricing Ability Studies show that as

brand loyalty increases, consumers are less

sensitive to price changes. Generally, they are

willing to pay more for their preferred brand

because they perceive some unique value in

the brand that other alternatives do...