What is brand loyalty?

Brand loyalty refers to a customer’s consistent preference and repeat purchases of products from a particular brand over others. It’s built through trust, positive experiences, and the brand’s ability to meet or exceed expectations, fostering a long-term relationship.

Why is brand loyalty important?

Brand loyalty is crucial — especially in the world of ecommerce — for a number of reasons:

  1. Customer retention: Customer retention is vital as it costs less to retain existing customers than to acquire new ones. Loyal customers contribute significantly to revenue, often making frequent purchases and promoting the brand through word-of-mouth.
  2. Revenue stability: Brand-loyal customers form a reliable revenue stream. They consistently purchase products, especially during promotions or new launches.
  3. Cost efficiency: Marketing to existing customers is less expensive than acquiring new ones. Loyal customers require less persuasion to make purchases, reducing advertising and promotional expenses.
  4. Brand advocacy: Loyal customers often become brand advocates, willingly recommending products to friends and family. They share positive experiences on social media, influencing others’ purchasing decisions.
  5. Competitive edge: In a crowded market, loyal customers stick with a brand despite competitive offers.
  6. Adaptability and resilience: Loyal customers provide a cushion during challenging times. They tend to remain committed even amidst market uncertainties or product changes.

These facets collectively emphasize how brand loyalty significantly impacts ecommerce businesses, underlining its pivotal role in growth, stability, and long-term success.

Inspiring brand loyalty examples

There are many great brands that have paved the way in building communities of brand-loyal customers.

To inspire you in your pursuit of the same, here are some great examples of brands with a high-level of customer loyalty:

1. Apple

Apple is renowned for its exceptional brand loyalty.

apple home page

They’ve cultivated this loyalty through a combination of:

  • Product Excellence: Apple consistently delivers high-quality, innovative products with sleek design and intuitive interfaces.
  • Ecosystem Integration: The integration across Apple devices encourages users to invest in multiple products, enhancing their loyalty.
  • Community Engagement: Apple fosters a sense of community among users through events like Apple Keynotes and Apple Store workshops.

Apple’s brand loyalty ensures a highly devoted customer base that eagerly awaits new releases and remains committed to the brand, even in a competitive market.

This loyalty translates into consistent sales, high customer retention rates, and a powerful brand image that extends beyond products to a lifestyle choice.

2. Starbucks

Starbucks has built a remarkable level of brand loyalty by offering not just coffee but an experience.

starbucks store

To build brand loyalty, they focus on:

  • Customer Experience: Starbucks prioritizes creating a comfortable atmosphere and personalized service.
  • Loyalty Program: The Starbucks Rewards app incentivizes repeat purchases through points that can be redeemed for free drinks, customizations, and other exclusive benefits.
  • Social Responsibility: Initiatives like fair trade coffee and community involvement strengthen the emotional connection with customers.

Starbucks’ brand loyalty results in a steady stream of returning customers who often become passionate advocates.

This loyalty helps maintain consistent revenue streams, even in areas with high competition (and, let’s be honest, better coffee), and positions Starbucks as a lifestyle choice rather than just a coffee provider.

3. Patagonia

Patagonia’s brand loyalty stems from its commitment to environmental causes and sustainability.

patagonia hat

They’ve created a loyal customer base by aligning their brand with values like:

  • Environmental Advocacy: Patagonia actively supports environmental causes, promoting sustainability and conservation efforts.
  • Quality and Durability: Their products are known for durability and quality, encouraging customers to make long-term investments.
  • Transparency: Patagonia is transparent about its sourcing, manufacturing processes, and the impact on the environment.

Patagonia’s brand loyalty not only drives sales but also attracts like-minded individuals who value sustainability.

Their loyal customer base actively supports the brand’s initiatives, amplifying their message and contributing to the brand’s positive impact on environmental causes.

This loyalty also serves as a differentiator in a crowded market.

4. Sephora

sephora billboard

Sephora has built strong brand loyalty through its:

  • Beauty Insider Program: Sephora’s loyalty program offers tiered rewards, exclusive products, and personalized recommendations based on purchase history.
  • In-store Experience: Sephora’s interactive and educational in-store experiences, like beauty classes and makeup tutorials, create a sense of community and expertise.
  • Online Community Engagement: Their online platform encourages user-generated content, reviews, and beauty tips, fostering a sense of belonging among customers.

Sephora’s brand loyalty results in devoted customers who actively engage with the brand both in-store and online.

Their loyalty program incentivizes repeat purchases, while the engaging shopping experience solidifies Sephora as a go-to destination for beauty enthusiasts.

5. LEGO

LEGO has fostered brand loyalty by encouraging imagination and creativity in children and adults alike.

lego brick

It’s helped create a dedicated fan base that knows them for:

  • Quality and Creativity: LEGO’s commitment to quality ensures durable, timeless products that encourage creativity and imagination.
  • Community Engagement: LEGO engages with its community through events, user-generated content, and fan clubs like LEGO User Groups (LUGs).
  • Nostalgia and Collectibility: LEGO’s ability to tap into nostalgia by creating sets based on popular franchises and its collectible nature encourages repeat purchases.

LEGO’s brand loyalty not only leads to consistent sales but also fosters a community of enthusiasts who engage with the brand beyond just purchasing products.

Their loyal fan base contributes to the brand’s innovation, idea generation, and even co-creation of new products through user feedback.

These brands showcase diverse approaches to cultivating brand loyalty, demonstrating how different strategies can lead to devoted customer bases and long-term success.

How to build brand loyalty

Here are some strategies you can use to build brand loyalty:

1. Create great products

Above all else stands the quality and effectiveness of your products.

A good product with bad marketing strategies will always beat a bad product with good marketing efforts in the long run.

For example, what keeps people coming back to Apple time and time again — and paying premium prices — is the standard of product quality they uphold.

How to implement:

  • Launch the highest quality products possible that solve real-world problems
  • Maintain product quality with regular, thorough quality control
  • Respond to customer feedback to continue iterating products

2. Exceptional customer service

Offering top-notch customer service is crucial.

When you respond promptly to inquiries, address concerns, and go the extra mile to make customers happy, you help create lifelong customers.

For example, Zappos, an online shoe and clothing brand, is renowned for its exceptional customer service.

They offer 24/7 customer support, allowing customers to reach a live representative at any time.

Zappos empowers its customer service team to go above and beyond for customers, even if it means surprising them with unexpected gestures like overnight shipping upgrades or hassle-free returns.

Their focus on delivering delightful experiences has created a loyal customer base that values their outstanding service.

How to implement:

  • Provide multiple support channels like email, live chat, and phone
  • Train your team to be friendly, patient, and knowledgeable
  • Resolve issues quickly and generously, going beyond expectations when possible

3. Loyalty programs and rewards

Create a loyalty program that rewards customers for their purchases.

Offer points, discounts, or exclusive access to new products or events in order to make customers feel appreciated for choosing your brand.

A great example of executing on this strategy is Ulta Beauty.

It has a robust loyalty program called Ultamate Rewards that features a standard points program while also offering exclusive perks for members, such as birthday gifts, access to special events, and bonus point opportunities.

Their loyalty program incentivizes repeat purchases and encourages customers to remain engaged with the brand.

How to implement:

  • Develop a simple loyalty program that’s easy to understand and join
  • Offer rewards for different levels of engagement or spending
  • Communicate the benefits clearly to customers through emails or on your website

4. Consistent brand messaging

Ensure your brand message is clear and consistent across all platforms.

This includes your website, social media, packaging, and advertising.

Remember: Consistency builds trust and familiarity.

Glossier do this particularly well. The skincare and makeup brand maintains consistent brand messaging across all platforms.

From their minimalist packaging to their social media presence and website design, Glossier embodies a clean, fresh, and inclusive aesthetic.

This consistent brand image has contributed to their strong brand loyalty and recognition.

How to implement:

  • Create brand guidelines for visuals, tone, and messaging
  • Use the same logo, colors, and language in all communications
  • Craft content that resonates with your audience and aligns with your brand values

5. Personalization and customization

Tailor experiences to each customer whenever possible.

Address them by name, recommend products based on their preferences, and send personalized offers or messages.

Nike does this exceptionally well.

Through their NikePlus membership program, they collect data on customer preferences, including workout habits and style preferences.

They then use this information to provide personalized product recommendations, exclusive content, and early access to limited-edition releases.

How to implement:

  • Collect customer data ethically to understand preferences
  • Use this data to personalize emails, product recommendations, or offers
  • Allow customers to customize products or services to their liking if applicable

6. Build a community around your brand

Create a sense of belonging by building a community where customers can engage with each other and with your brand.

Fitness brand Gymshark is one of the best in the world at doing this.

They create events, meetups, discussions, and online communities that help foster community around the shared pursuits of their customers.

How to implement:

  • Start a social media group or forum related to your brand or products
  • Share customer stories or testimonials on your website or social media
  • Host events or contests that involve your customers and encourage interaction

7. Listen and respond to feedback

Finally, be sure to show customers that their opinions matter by actively listening to their feedback.

Act on their suggestions or concerns to demonstrate that you value their input.

How to implement:

  • Encourage feedback through surveys, reviews, or social media polls
  • Respond promptly and appreciatively to both positive and negative feedback
  • Implement changes based on customer suggestions whenever feasible

By implementing these strategies consistently, you can start building strong relationships with your customers, encouraging loyalty, and fostering a positive perception of your brand.

How to measure brand loyalty

Measuring brand loyalty involves assessing various aspects of customer behavior, engagement, and perception.

Here are some key metrics and methods to gauge brand loyalty:

1. Customer retention rate

Customer retention rate indicates the percentage of customers who continue to purchase from your brand over a specific period.

A high retention rate suggests strong brand loyalty and customer satisfaction.

To calculate retention rate:

  1. Start with Numbers: Count how many customers you had at the start of a period (like a month or year).
  2. Subtract New Customers: Deduct the number of new customers acquired during that period.
  3. Total at the End: Count how many customers you have at the end of the same period.
  4. Calculate Rate: Subtract new customers from the end total, divide by the start total, then multiply by 100 to get a percentage.

2. Repeat purchase rate

Repeat purchase rate measures the percentage of customers who make more than one purchase, a clear sign of customer loyalty.

It indicates how many customers are returning to buy again, showcasing their loyalty to the brand.

To calculate repeat purchase rate:

  1. Count Repeat Customers: Determine how many customers made more than one purchase.
  2. Total Customers: Count the total number of unique customers you have.
  3. Calculate Rate: Divide the number of repeat customers by the total number of customers, then multiply by 100 to get a percentage.

3. Net Promoter Score (NPS)

NPS is obtained by asking customers a single question: “How likely are you to recommend our brand/product to a friend or colleague?”

Customers respond on a scale from 0 to 10.

  • Promoters (score 9-10) are loyal enthusiasts who will advocate for your brand.
  • Passives (score 7-8) are satisfied but not overly enthusiastic.
  • Detractors (score 0-6) are unhappy customers.

4. Customer Lifetime Value (CLV)

CLV predicts the total revenue a customer is likely to generate throughout their relationship with your brand.

Higher CLV often correlates with loyal customers who make frequent purchases over an extended period.

You can track CLV with analytics tools like Triple Whale, or calculate CLV manually:

  1. Average Purchase Value: Calculate the average amount a customer spends in a single purchase. Add up total revenue from all purchases and divide by the number of unique customers.
  2. Purchase Frequency: Determine how often, on average, a customer makes a purchase within a specific period (month, year). Count the number of repeat purchases and divide by the number of unique customers.
  3. Customer Lifespan: Estimate the average number of years a customer continues buying from your brand. This could be based on historical data or industry averages.
  4. Calculate CLV: Multiply the Average Purchase Value by the Purchase Frequency and then by the Customer Lifespan to get an estimate of how much revenue a customer is expected to generate throughout their relationship with your brand.

5. Brand mentions and social media engagement

Another good way to measure brand loyalty is by monitoring brand mentions, comments, shares, and engagement on social media platforms.

Analyze sentiment and the level of interaction to gauge how customers perceive and engage with your brand.

A higher level of engagement can then of course indicate stronger brand loyalty.

6. Customer surveys and feedback

Finally, you can conduct surveys to gather feedback from customers.

Ask about:

  • Their satisfaction
  • Likelihood to recommend
  • Reasons for choosing your brand
  • Areas for improvement

Analyzing this feedback helps gauge loyalty and areas needing attention.

By combining these methods and metrics, you can gain insights into the level of brand loyalty your customers have and track changes over time, helping you make informed decisions to nurture and strengthen customer relationships.

Brand loyalty FAQs

Yes, but it’s nuanced. Gen Z tends to prioritize authenticity, values, and experiences over traditional brand loyalty. They’re open to trying new brands but can become loyal if a brand aligns with their beliefs and consistently delivers quality and relevance.

To foster long-term customer relationships. The goal is to create a devoted customer base that consistently chooses a particular brand over others. This loyalty leads to repeat purchases, advocacy, and sustained revenue.

Positive experiences, trust, and emotional connections. Factors like product quality, excellent service, shared values, and personalized experiences drive customers to remain loyal to a brand.

Emotional loyalty. When customers feel deeply connected to a brand on an emotional level, their loyalty becomes unwavering. It goes beyond product satisfaction to a strong emotional bond with the brand.

Yes, it can be a key performance indicator (KPI). Measuring customer retention, repeat purchases, NPS, and CLV are metrics that reflect brand loyalty and can be used as KPIs to assess business performance.

Absolutely. Brand loyalty significantly impacts customer behavior. Loyal customers tend to make repeat purchases, spend more, advocate for the brand, and resist switching to competitors, affecting a brand’s success and revenue.