Brand Loyalty

Brand loyalty occurs when a customer chooses to repeatedly purchase a product produced

by the same company instead of a substitute product produced by a competitor. For example,
some people will always buy Coke at the grocery store, while other people will always
purchase Pepsi.
Brand loyalty is often based upon perception. A consumer will consistently purchase the
same product because she perceives it as being the superior product among the choices
available. You should note that brand loyalty usually relates to a product, not a company. For
example, while you may be loyal to your Honda Accord, but when it comes to motorcycles,
you might believe that a Harley leaves a Honda motorcycle in the dust.
Brand loyalty is important for several reasons. First, it reduces the cost of production because
the sales volume is higher. Second, companies with brand-loyal customers don't have to
spend as much money on marketing the product, which will permit the company to either
retain more earnings or to invest resources elsewhere. Third, companies may use premium
pricing that will increase profit margins. Finally, loyal customers tend to recommend
products that they like.
Businesses have to exert significant effort to facilitate brand loyalty. You need to convince
potential customers that your product has a significant advantage over other products to
justify consistent purchases of your product. Businesses also will attempt to leverage brand
loyalty developed for a product to other products offered by the company. The hope is to
create brand loyalty for as many products as possible.

What is the Difference Between Brand and Customer Loyalty?

The main differences between brand and customer loyalty are:

1. Brand loyalty means that customers will buy anything that comes from a particular
company/brand, while customer loyalty means that customers will only buy a specific
product.
2. Brand loyalty usually refers to brands in the same industry, while customer loyalty
usually refers to related products within the same industry.
3. Brand loyalty can be measured over time, while customer loyalty can be measured
once the sale is made.
4. Brand loyalty is not as strong as customer loyalty because of potential changes in the
company/brand’s image.

Factors that Contribute to Brand Loyalty

There are at least three key factors that you need to consider in order to drive brand loyalty:

brand equity, brand awareness, and brand attributes. Let’s take a look at each in turn. 
Brand Equity

Brand loyalty is just one part of your overall brand equity, which is the extent of your brand’s

power as determined by consumers’ positive or negative knowledge, perceptions, and

experiences with your brand. When customers think in positive terms about your brand, or

have strong, engaging experiences with it, they’re more likely to become loyal. Brand equity

is probably the key measure of your overall brand health, so it's vital that you try to build it,

and track changes in it.  To learn more about how to measure, build and maintain brand

equity, take a look at our in-depth guide. 

Brand Awareness

As we’ve already noted, today’s marketplaces are crammed with choice. In order to survive

and thrive, you’ll need to cut through the noise to reach your target audience. Brand

awareness is the degree to which the market knows about your brand. It means making sure

your brand is the first that comes to mind when a customer is looking to buy a product that

you sell, that customers recognize your branding and brand name, or that they recall your

brand when thinking about products and services like yours. As such, building brand

awareness is usually the first step on the road to brand building and brand loyalty. Read more

about how you can build brand awareness here. 

Brand Attributes

Brand attributes are the traits and features that customers associate with your brand. Maybe

your coffee shop is the trendiest in the neighborhood, the most ethical, or has the best-tasting

matcha latte.  Brand attributes drive brand loyalty only insofar as the traits that you

communicate about your brand match those that your target audience are seeking. For this

reason, it's important to test how customers perceive your brand attributes, and find out what

attributes they’re looking for. We recommend a brand attribute survey for that.

How to measure brand loyalty

Some companies gather data from their loyalty programs as a proxy measure for brand
loyalty. That’s great, but brand loyalty doesn’t just mean sales. Customers might keep
coming back to your coffee shop because it's on the way to work and they can collect stamps
to earn a free cup, but that doesn’t necessarily mean that they’re willing to champion your
brand or continue to choose it if a competitor offers a better deal. That’s why it's really
important to get to the heart of brand loyalty through regular and comprehensive analysis.

One way you can measure brand loyalty is through a customer survey. You can ask your
target audience a range of questions that capture things like how often they purchase your
products and services, how often they consider those of competitors (and which
competitors!), and how they perceive your brand generally. One of the best things about
measuring brand loyalty through surveys is that they can be run regularly so you can track
changes in loyalty, celebrate wins, and take swift corrective action when necessary.
SurveyMonkey’s Brand Tracking solution can help you establish a baseline and track
changes in brand loyalty in real-time.

So, how is brand loyalty measured using a survey? Let’s take a look at the 6 key metrics you
can capture through surveys to track how keen your customer base is, and how loyal they are
to your brand.

Brand loyalty metrics

Metric 1: Customer satisfaction

If customers are satisfied with what you’re offering, they’ll keep coming back for more. First,
asking about overall customer satisfaction helps you understand how, in general, your
products and services are meeting or (better yet) exceeding customer expectations.

Remember though, that customer satisfaction isn’t just about a single aspect of your product
or brand. Customers might be satisfied with the prices they’re paying, but less satisfied with
the convenience of your retail outlets. Or, they might be satisfied with your salespeople but
dissatisfied with the overall customer experience. When capturing this metric, it's important
to dive as deep as possible. You might ask questions like:

How convenient is our company to use?

Compared to our competitors, is our product quality better, worse, or about the same?

How well do our customer service representatives answer your questions?

How likely are you to recommend us to others?

Loyalty builds when customers become committed to your brand and make repeat purchases
over time. You want to understand what is inspiring that commitment on their part.

Metric 2: Brand Trust

All brands must earn and retain the trust of their customers to ensure loyalty, but trust is
especially important for brands that handle sensitive information, such as banks, online
retailers, or healthcare providers. Even if you don’t handle sensitive information, you need to
gain the trust of your customers if you’re to get them to try new products and services, or
even to complete customer feedback surveys for you. If your brand handles sensitive
information, or even if it doesn’t, assess the level of trust your customers feel for your brand.
Ask questions like:

Do you trust our brand?

How did we earn your trust?

How do we keep your trust?

Use responses to questions about trust to inform the products you offer–and target your brand
messaging accordingly. To learn more about brand trust and how to cultivate it, take a look at
this article.

Metric 3: Brand Esteem

Brand esteem or goodwill is customers’ respect for and attraction to a particular brand. It’s
not to be confused with brand awareness or familiarity, which is the level of recognition of a
brand. While a brand might be well known (a good thing), it may not in fact be well regarded
(not a good thing). Brand esteem is about the favorable sentiment toward a brand, and in an
ideal world, this will be positive!

You can use a series of questions to distinguish brand awareness from brand esteem:

Have you heard of our brand before? (familiarity)

How well do you know our brand? (familiarity)

How positively do you regard our brand? (esteem)

Do you prefer our brand over our competitor? (esteem)

Metrics 4 and 5: Perceived quality and value

A customer’s perceived quality of a brand is their opinion of a particular product’s, service’s

or brand’s ability to fulfill his or her expectations:

How reliable would you consider our brand?

How would you rate the quality of our product?

Closely related is perceived value, which is a consumer’s opinion of a product’s value to him
or her specifically.

For example, a person might view Tesla Motors as a brand that produces innovative,
attractive electric vehicles that amaze and delight and would rate perceived quality quite high.
However, if that same person considers the price tag to be a bit too steep, the perceived value
might be low for her or him specifically.

Here are some brand loyalty survey question examples that measure perceived value:

How valuable is [brand or product] to you?

How likely would it be for you to switch brands if an alternative brand was sold in a more
convenient location?

How likely would it be for you to switch brands if an alternative brand was cheaper?

Metric 6: Net Promoter Score®

Net Promoter Score, or NPS, is often called the ‘Ultimate Question” because it can capture a
lot in a single question that can be answered in seconds. By simply asking your target
audience how likely they are to recommend your product, service or brand to a friend or
colleague, you’ll gain insight into how satisfied your customers are, how willing they are to
share positive word of mouth about it, and how loyal they are to you. After all, a customer
would only promote your brand if they were loyal to it (that’s why two-thirds of Fortune
1000 companies currently use the NPS as a key measure of brand health). To read more about
how to use NPS in a survey, read this quick article.

Customer Loyalty vs. Brand Loyalty

Before we go, let’s make sure that you don’t confuse customer loyalty with brand loyalty,
because they’re often spoken of in the same breath. Customer loyalty describes a
commitment from customers to continue purchasing from you based on the benefits received
from those purchases. So, when a customer keeps coming back to make repeat purchases
because the product has some feature they enjoy, or they gain something in terms of price and
rewards (like in a loyalty program), your customers are loyal. And loyal customers are great
for the bottom line.

The problem is that customer loyalty can easily be swayed. If a competitor comes along with
a similar product or a new rewards program, customers might be tempted to switch. Brand
loyalty, however, is a commitment from customers to continue purchasing from you because
of their experiences and perception of the brand. Since it's not dependent on price or the
availability of substitutes, it's more sustainable in the long run - and better for your brand
health.