Consumer loyalty: Strategies for building lasting consumer connections

Consumers today face increased pressure on their wallets and are inundated with endless brand choices, making their path to purchase more complex than ever. Alongside this, they recognise their value to brands and expect to be rewarded for their loyalty.

In the area of consumer goods and services for example, being rewarded for brand loyalty has gained significant importance in recent years. Our 2020 Value Shift study found that only 17% of global consumers considered loyalty rewards meaningful. However, this perception has shifted drastically, with 39% of consumers in the US and 52% in the UK now valuing loyalty rewards.

While incentives and good deals also attract consumers, younger demographics, particularly those aged 18 to 24, are less swayed by rewards programmes. This indicates that loyalty should be approached beyond mere cost reduction.

Despite the allure of rewards, many consumers exhibit loyalty once they find a brand they like. However, there's a growing emphasis on fairness from brands, with consumers expecting ethical treatment of employees and support for communities.

To secure long-term loyalty, brands must diversify their strategies beyond discounts and coupons. Innovations, empathetic experiences, and fair treatment of both customers and employees are crucial elements in fostering lasting loyalty.

Habitual versus devoted consumers

Distinguishing between habitual loyalists and genuinely devoted customers is a critical aspect of any brand growth strategy. Habitual loyalists are those customers who repeatedly purchase a brand's products or services out of habit or routine rather than out of a genuine emotional connection or preference for the brand.

On the other hand, genuinely devoted customers are those who have developed a strong emotional attachment to the brand. They actively seek out the brand's products or services because they enjoy them and feel a sense of loyalty and connection to what the brand stands for.

It’s crucial for brands to cultivate genuine affection and loyalty among their customer bases. This can be achieved through various means, such as delivering exceptional customer experiences, maintaining consistent brand messaging, offering unique value propositions, and building emotional connections with customers through storytelling and engagement initiatives.

Loyalty through experience

Experience plays a pivotal role in driving loyalty, with every interaction influencing consumer perceptions. Brands like Abel & Cole and Starbucks have excelled by addressing consumer concerns and personalising their offerings to enhance loyalty.

Furthermore, fostering a sense of community among like-minded customers can strengthen tribal loyalty, further solidifying brand allegiance.

The era of conspicuous consumption is fading, with consumers now prioritising value and ethical considerations. Brands must adapt to these shifting expectations to maintain customer loyalty and drive growth.

By understanding and measuring customer loyalty, brands can identify areas for improvement and provide value beyond mere discounts. This reassessment is crucial in an era marked by economic pressure and intense competition.

Brands must prioritise building genuine loyalty, not just habitual purchasing behaviour, to create a resilient customer base less likely to defect to competitors. This requires delivering value, personalised experiences, and ethical practices, crucial for adapting to changing consumer expectations for sustained growth and success in 2024 and beyond.

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