Developing brand loyalty among customers is useful for a number of reasons, from attracting new customers to retaining current ones. When customers are bombarded with an abundance of choices, deals, and discounts, the loyalty they feel towards a particular brand often becomes the deciding factor for making a purchase.
Yet while brands know that retaining long-lasting customers is cheaper than acquiring new ones, loyalty remains difficult to cultivate. This is because as products and marketing has evolved, so has customer decision making. While there are ongoing efforts to understand the trends and tastes of every new named generation, a loyalty survey by marketing company StrongView has shown that age and income are not the main indicators for determining customer loyalty to a brand. Instead they found that loyalty is essentially even across all age brackets - young and old. This means age and income have less effect on being a loyal customer than most people realize.
Now, this doesn’t mean these types of customer data should be dismissed entirely in a brand’s loyalty strategy. Demographic factors such as age, income, and occupation are incredibly useful when analyzing data and segmenting customers. But cultivating true brand loyalty relies on knowing and understanding what drives key brand enthusiasts to make a purchase and what their motivations are when choosing to stay loyal to a brand. Marketers can’t always rely on age and income to answer those questions.
Instead, the secret to gaining loyal customers lies in context. Providing contextually relevant information and content that matches the customers’ current needs does a lot more to build the type of mutually beneficial relationship that leads to long-lasting loyalty than relying solely on personal demographics. Research shows that brand enthusiasts are more likely to buy when they receive messaging that:
- Matches their expectations of the brand
- Matches their past interactions with the brand
- Was relevant to their needs
- Was received at the right time
- Was helpful in making a purchase
Obtaining this level of customer insight and creating messaging that resonates accordingly with customers the requires in-depth efforts on the brand side. Luckily there are numerous methods for cultivating customer loyalty:
Listen Closely To Customers
There’s something to be said for the phrase ‘ask and ye shall receive’. Brand can easily convert lukewarm customers into loyal ones and loyal customers into dedicated brand advocates by listening to customers and then taking insightful actions in response. Brands who show they care about customer opinions or motivations by responding accordingly are viewed as collaborating with their customers instead of just selling to them. For companies in the financial sector, knowing your customers and understanding what their concerns, worries, and drivers are is especially important.
Improve Customer Service
Listening and responding to customers goes hand-in-hand with customer service. In one retail survey 1/4 of respondents stated poor customer service was one of the main reasons for they stopped being loyal to a brand. With the increasing availability of better digital channels, services, and communication tools customer accordingly expect to receive better customer service. If customers trying to resolve an issue experience complicated service processes, repetitive interactions, and poor advocacy from the brand, they are more likely to switch to a competitor that makes them feel more valued.
Create Benefits Your Customers Want
While age and income might not de facto determine customer loyalty, they do determine customer shopping habits and preferences. Understanding how age and income influences how people shop is know brand can differentiate themselves as the better choice. In their Retail Customer Loyalty Strategy Customer Communications Group found that when products, price, and access is equal between two brands, customer decision factors differed based on income groups:
Lower Income - fair treatment, status, trust
Middle Income - rewards or incentives
Higher Income - VIP benefits and experiences
Age and income will not automatically determine customer loyalty. By knowing what matters to customers of different ages and financial backgrounds you can develop the right incentives and perks to make customers choose you over a competitor and thus drive loyal actions.
If you're looking for more ways to increase customer loyalty, reach out to us today!