Marketers have long sought to build relationships with consumers to encourage consumer loyalty, but their tactics are falling short.
Many marketers try to drive consumer loyalty through traditional channels, such as maintaining a CRM database, launching a loyalty rewards program, and even using a social media following as a de facto "community" (hint: it's not). Yet, loyalty is getting hard to come by, and consumers cheat on brands often: Fully 77% of people retract their brand loyalty faster than they did three years ago.
Marketers still make two significant errors when using traditional loyalty tactics: trying to develop a relationship built on transactions; and not listening to consumers.
Marketers often try to get consumers to stick around solely by offering points, levels, and reward discount codes, only to find that consumers ignore these outreach methods: 78% of Americans abandon loyalty programs they signed up for.
Another way a company can quickly lose loyal customers is to ignore them. Fully 83% of consumers say they would be more loyal to a brand if they knew that the brand would act on their feedback and make improvements. In a study of 6,500 Americans, 85% said they have given some form of feedback to a brand or company, but just 46% of those people said they feel their feedback was used in a constructive way.
When companies listen to their customers, they succeed. When companies don't listen, they flounder.
A shift is happening, and marketers who act on it are ahead of the game. Traditional loyalty tactics are actually missing some of the critical components that make loyalty possible. Points and one-way communications do not define the future of loyalty. The X factor for building consumer loyalty is emotional relationships built from a customer-first dialogue.
Marketers from revolutionary fitness and technology brand Peloton once said, "We made a conscious decision not to offer a rewards program because we felt it risked cheapening the authentic relationship we have with our community. Instead, we aim to cultivate emotional loyalty by listening closely to members."
The phrase "community" is roaring back to life for brands as a central strategy to build direct relationships with consumers.
Here are three key ways to do it right.
1. Build a brand community to showcase shared values
A successful brand community is built around a common purpose. It is an effective way to embody the brand's core values: 87% of consumers overwhelmingly choose brands that match their values.
But shared values are not just about telling a story of who you are as a brand. Many think of community-building as focused entirely on brand fandom, with the brand at the center of attention. But a community is about empowering people to tell the story of who they are and what they stand for.
Consider a brand like Jeep. The purchase of a vehicle entails much more than just the vehicle itself. The brand represents a lifestyle filled with adventure; owners embrace that owner lifestyle fully. Jeep helps build on sense of community by hosting "Jamborees," events where owners gather together.
2. Offer an outlet for consumer-driven innovation
Creating a positive feedback loop not only facilitates emotional bonds but also helps your brand stay ahead of trends. Most marketers live in an echo chamber, and very few can garner organic feedback.
By changing "consumer" to "collaborator," brands can crowdsource new ideas while increasing customer satisfaction. When marketers have a community at their fingertips, they can solicit feedback through focused discussions, surveys, and reviews. Four in five consumers say they enjoy offering feedback and making a difference to brands. Truly a win-win scenario.
When ModCloth, an online retailer of indie and vintage-inspired clothing, listened to its customers, it made the decision to no longer separate plus-sized clothing from its conventional-sized options. Customers helped them take a stand against the outdated idea that those who are plus-sized are less fashion-forward. It was an authentic, on-brand change because it originated from customers.
3. Create a center of mass for your brand
As is the case with any marketing strategy, a brand community cannot be a siloed effort. For a community to achieve maximum results, it must be in harmony with overall business goals.
Almost always, brand-led community-building starts as a means to support the brand, but for a thriving community an exciting shift can happen. Successful brand communities flip the script: A community stops supporting the brand, and the brand starts supporting the community. And that's when companies hit cult-like followings, and the brand becomes a part of one's identity.
Such loyalists are willing to seek you out; they are immune to competitive promotions, and they are willing to pay more just because it's coming from the brand.
In short, those consumers don't cheat on you.
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Keeping consumers from abandoning a brand is difficult for today's marketers, but maintaining their loyalty is a much better strategy than constantly seeking new ones to replace them. Brands must always be listening and making improvements, thereby appealing to the higher-order benefits that consumers truly seek and value.
More Resources on Brand Communities and Consumer Loyalty
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