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CONSUMER LOYALTY - IMPORTANCE, FACTORS, ENHANCEMENT


CONSUMER LOYALTY IMPORTANCE

In the modern world, consumer loyalty to a particular brand is very hard to overestimate. Indeed, in a time when most markets are saturated with trade names, and consumers are almost fully informed about prices and quality thanks to the internet, they prefer entertaining content and unconsciously fall under the constant influence of powerful brand marketing complexes. At this time, building a business model that relies on constantly acquiring new customers and neglects maintaining the current customer base can be both time-consuming and expensive.

Acquiring a new customer is significantly more expensive, perhaps even orders of magnitude more expensive, compared to retaining a current customer through loyalty development. Indeed, even a superficial analysis will provide a list of factors confirming the necessity of supporting consumer loyalty:

• Marketing expenses. Acquiring a new customer requires relatively large expenditures on advertising, marketing, and product promotion, whereas current customers are already familiar with the brand. The crucial step when a potential customer makes their first purchase is already completed. Trust between the brand and the consumer is established. For repeat purchases, the consumer no longer needs to go through the entire sales funnel, which is costly for the brand in terms of marketing efforts.

• Product learning. New customers may require time and resources to familiarize themselves with the product or service, learn its advantages and quality. Current customers already have a complete understanding of the product or service, requiring less additional consultation and explanation, saving the brand time and effort for other tasks and other customers.

• Trust and loyalty. Current customers have already formed a certain level of trust in the brand since they have previous experience with the product or service. Customer trust, on one hand, helps the brand sell new models and products to current customers more quickly and with significantly lower time and resource costs. On the other hand, customer trust tends to spread through recommendations, helping expand the customer base.

• Customer service costs. Customer service costs may be lower for current customers, as they are already familiar with the processes and may require less support. A current customer purchasing the same or similar product will require significantly less effort from the brand to support the product.

• Financial stability. Satisfied current customers are more likely to make repeat purchases, contributing to a steady influx of funds. Loyal consumers ensure a constant income for the company, forming the foundation of financial stability, allowing for more spending on marketing and attracting new customers.

• Competitiveness. In the realities of saturated markets, maintaining and supporting a stable base of loyal customers makes the brand more competitive. Loyal consumers are less likely to switch to competitors, and along with financial stability, this provides resources and opportunities for product, process, and overall business improvement, ensuring long-term competitiveness.

Of course, depending on the market, the situation may vary. However, in general, investing in the maintenance and satisfaction of current customers is a prerequisite for business development in today's competitive conditions in almost all markets.


HIGH LOYALTY FACTORS

Consumer loyalty to a brand depends on various factors. Here are some of them:

• Quality of products. High-quality products are one of the key factors in loyalty. If customers are satisfied with the quality, they are more likely to remain loyal to the brand.

• Service quality. Quality customer service, prompt problem resolution, and timely responses significantly impact loyalty.

• Emotional connection. Creating an emotional connection between the brand and the consumer ensures loyalty. Positive emotions associated with the brand greatly influence customer decisions.

• Innovation. Customers who see constant development and innovation in a brand tend to remain more loyal in the long term.

• Loyalty programs. Attractive loyalty programs, such as discounts, bonuses, or gifts, motivate customers to stay faithful to the brand.

• Community activities. Active participation in public initiatives or supporting local communities creates a positive impression and increases loyalty.

• Communication and marketing. Effective communication and marketing efforts strengthen the brand's image and create a long-term positive perception in the minds of consumers.

These factors often interact, creating a comprehensive picture of the interaction between the brand and its customers, contributing to a holistic perception of the brand, and forming the conditions for long-term brand loyalty.


LOYALTY ENHANCEMENT

Therefore, most businesses are interested in creating, enhancing, and consistently supporting consumer loyalty. The mentioned factors indicate a minimum set of ways to increase loyalty that should be considered in the brand marketing process. The importance of each factor depends on the specific industry and practices applied in the market. Nevertheless, loyalty programs, which directly motivate customers to stay with the brand in the long term, deserve special attention.

There are several main types of loyalty programs, such as bonus programs, discount programs, cashback, gift programs, gamification, etc., which we encounter every day. Therefore, it may not make sense to list and describe each type of program separately. Instead, it is worth noting that in modern realities, competition often revolves around loyalty programs rather than the products themselves.

The following factors come to the forefront:

• creativity,
• program visualization,
• emotional components,
• innovation, etc.

Ignoring these factors makes it challenging to create an effective loyalty program, which is crucial for marketers and business owners to understand.

Achieving the commercial objectives of a company through effective marketing requires a deep understanding of the market situation, consumer needs, the ability to analyze and explore alternatives, and a creative approach to problem-solving. Our company has extensive experience in defining optimal marketing strategies for our clients' businesses, creating a strong brand and market positioning, as well as developing a marketing mix and implementing the chosen strategy. You can familiarize yourself with the services and solutions our company offers on the "Services" and "Solutions" pages, respectively.