What is 'Brand Loyalty'

Brand loyalty is a consumer behavior pattern where consumers become committed to a particular brand and make repeat purchases over time. Companies use creative marketing strategies, such as loyalty or rewards programs, trials, brand ambassadors, and incentives like free samples to build brand loyalty.

BREAKING DOWN 'Brand Loyalty'

In a highly competitive market overwhelmed with new and established brands, companies employ different tactics to create brand loyalty. Loyal customers will purchase their favorite brand regardless of convenience or price. Companies follow consumer buying and shopping trends, build relationships with their customers through active customer service, and engage brand spokespersons.

Brand loyalty is most successful when it addresses the values that are most important to their customers. Customer loyalty leads to repeat customers and increased profits. Marketers will study consumer buying and shopping trends to help them develop brand loyalty.

Consumer Trends and Brand Loyalty 

Consumer trends are the habits and behaviors exhibited by consumers regularly and over time. Some trends are static, but most evolve periodically. Companies will collect and analyze data on customer spending habits to better understand how to market their product. Marketers will track changes and create a corresponding marketing campaign to help the company acquire and keep its loyal customers. Companies hire brand ambassadors to be spokespersons for their products. By promoting the brand's image and stimulating interest, the company hopes to influence purchasing behaviors. Brand ambassadors can be an effective way of disseminating positive word of mouth. 

Continuous monitoring and research are needed to measure the utility of products and identify modifications that will offer additional consumer benefits and increase brand loyalty. When a company ignores consumer trends, they forfeit potential profits, erode their market share, and lose brand-loyal customers. Many giant companies such as Blockbuster, which once had a monopolistic advantage, have failed because their product was misaligned with their customers' growing needs and environments. To assume that a product will always meet anticipated needs of the consumers is a certainty for failure.  

Brand Loyalty and the Internet

Before the internet, the most common way to build brand loyalty was through the interaction of a salesperson and a customer. Today, the internet provides access to thousands of consumer products and services without the salesperson as the intermediary. Consumers, empowered to conduct independent research and compare competitors' offerings, make informed choices and are less committed to specific brands. As a result, firms are challenged with how to distinguish their products from competitors and how those differences add value. Building brand loyalty via the internet is challenging, yet can reap significant rewards. Brands that continue to meet the needs of the consumer will flourish. Incorporating the internet in marketing strategies can increase the base of customers dedicated to a brand.

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