I used to be what you could call a “drugstore beauty junkie”. With no loyalty to any particular brand, I bought whatever products were cheapest. Then I stopped into a handmade soap store one day, where a salesperson spent an hour walking me through products, testing them on my skin, and telling me about their charity involvement. Leaving with a bag full of newly-purchased goodies (and several free samples), I went home, found their website, and subscribed to their email list. Now, this former “drugstore beauty junkie” is a bonafide brand loyalist.
What exactly makes someone buy expensive soaps and beauty products over a cheaper alternative? Or renew their Amazon Prime membership, even when the monthly fee increases? The truth is, loyalty isn't just about one great reward (or free sample). It's not just about one great interaction with an employee. For a consumer moving through the sales cycle, loyalty is created by a complete experience that serves their needs through every touchpoint in their journey.
Building loyalty in today’s world means creating a cohesive customer experience across channels. Whether a consumer finds your institution through a Google search leading to your website or by walking down the street, they should have the same positive experience. Your website should maintain the essence of your physical branch and vice versa. When researchers at USC Dornsife took a look at the relationship between psychology and branding, they noted that the cognitive dissonance caused by clashing physical and digital experiences is enough to drive consumers away.
Both rational and emotional factors come into play when creating loyalty. According to Consumer Brand Builders, the seven factors that drive consumer loyalty are:
Convenience involves being readily available to consumers (like having a digital presence that meets them where they are), while expectations mean maintaining consistency in your product — including its price, value, and delivery of brand promises. A good customer service experience can include a quick resolution of a consumer’s problem or providing a knowledgeable answer to a consumer’s question about a product. These are rational factors that deal with how a consumer thinks a brand will help them in their lives.
On the emotional side, relationships, rewards, reputation, and outreach all factor into how a consumer feels about your brand. It’s the connection that someone feels with a customer service representative who grew up in the same town. It’s the joy that comes from receiving a reward for doing business with you. It’s the peer-approval offered by a positive reputation or the goodwill created by getting involved in your community. These are all important factors in creating emotional loyalty.
To neglect any of these touchpoints could mean losing the chance to build a real relationship with your account holders and ensure their steadfast engagement with your financial institution.
While social media has in some ways made marketing easier, it’s also made it more important than ever for companies to build rapport with consumers. With Yelp, Facebook, Google, and more becoming a resource for people to scope out new businesses, ordinary consumers (even ones who have had minimal interactions with your brand) are now looked at as authorities of it.
Because of this, marketing to brand-new consumers is harder than ever. It’s also less cost-effective than strengthening relationships with current customers. Aside from repeat business, a loyalist has the possibility to turn into an advocate, doing all the hard work for you as they spread the good word about your brand.
With a reputation for cynicism, studies have found that Gen X is the most loyal generation with their chief concerns revolving around the rational factors that create loyalty: time-saving, value, and customer service. It would stand to reason that if these factors were to change, like a price increase or a longer shipment time for online ordering, that loyalty would dissipate.
While Millenials are more discerning, they have been argued to be the most loyal generation because of the emotional connection they form with brands. They are more likely to expect rewards programs and social consciousness — in other words, companies that offer more than just great products and services. In fact, 80% of millenials are involved in a rewards program and 81% expect companies to participate in social change.
Understanding what makes someone loyal to your brand is a huge component in understanding how to maintain that loyalty. A qualitative study using a questionnaire to determine consumers’ loyalty to their brand of toothpaste found that there are different categories of consumers based on their level of loyalty. Your “core consumers” are those who have high loyalty and a strong belief in your brand. These are the people who would most benefit from being rewarded for their interactions or money spent, which in turn would deepen their loyalty. (Take a look at some of the best rewards programs we’ve seen!)
This study also found that, for many consumers, trust is a prerequisite for loyalty. For a consumer to support you and feel a strong emotional allegiance to your brand, they have to trust it. Once that trust is solidified, even a scandal wouldn’t make them stray.
So, if you did a metaphorical trust fall, would your account holders catch you? The Financial Brand posed a similar question, asking if consumers could really love their financial institution. The answer was not only yes, but that a deep emotional connection can “predict certain consumer responses, such as the likelihood of selecting the bank for certain products, engaging with the brand in social channels, and referring the bank to a friend through word-of-mouth.”
When it comes to building loyalty, everything — from a top-notch website to a well-trained frontline staff to a solid rewards program — matters. A positive experience with your financial institution from start to finish can turn account holders into brand loyalists.