Benefits of Brand Loyalty
The benefits of brand loyalty are longer tenure (or staying a customer for longer), and lower sensitivity to price. Recent research found evidence that longer-term customers were indeed less sensitive to price increases.
According to Andrew Ehrenberg, consumers buy “portfolios of brands.” They switch regularly between brands, often because they simply want a change. Thus, “brand penetration” or “brand share” reflects only a statistical chance that the majority of customers will buy that brand next time as part of a portfolio of brands. It does not guarantee that they will stay loyal.
By creating promotions and loyalty programs that encourage the consumer to take some sort of action, companies are building brand loyalty by offering more than just an advertisement. Offering incentives like big prizes creates an environment in which customers see the advertiser as more than just the advertiser. Individuals are far more likely to come back to a company that uses interesting promotions or loyalty programs than a company with a static message of “buy our brand because we’re the best.”
Popular Loyalty Programs
Below are some of the most popular Loyalty Programs that are currently being used by major companies as a means of engaging their customers beyond traditional advertising.
Sweepstakes and Advergames
- Branded digital games that engage consumers with prize incentives
Contests
- Skill tests and user-generated promotions such as video and photo contests
Social
Media
Applications and Management
- Develop promotions and offers within social media channels
- Ongoing management and maintenance of brand Facebook pages and other social media
Customer Rewards Programs
- Online points programs – earn prizes for incremental purchase behavior (e.g., JetBlue’s TrueBlue and American Airlines’s AAdvantage frequet flyer programs)
- My Coke Rewards, Pepsi Stuff, and the Marriott Rewards loyalty programs
Marriott: Marriott is known for its customer rewards program – Marriott Rewards.
- Promotional auctions – bid for prizes with points earned from incremental purchase behavior
Email Clubs
- Manage overall subscription databases – national and/or segmented by market
- Design, develop, and publish email blasts
- Develop templates specific offers and promotions / delivery
Text
Messaging
/ Mobile Apps / Desktop Apps and
Widgets
- SMS Promotions
- iPhone apps
- Branded web apps