Brand loyalty growing in consumers’ minds and hearts

Mihai Cristea 22/06/2021 | 16:58

Yotpo’s latest survey, carried out among 3,800 respondents across four different demographics (Gen Z, Millennials, Gen X, and Baby Boomers) and three different geographies (US, UK, and Australia), reveals that one of the many changes generated by COVID-19 in shopper behaviour is related to consumer loyalty, which has actually gone up year-over-year from 2019 to 2020. 

By Romanita Oprea

 

When asked to rate their brand loyalty compared to one year ago, the number of survey respondents who rated themselves as “more” brand loyal rose from 24 percent in 2019 to 26.4 percent in 2020. Those who rated themselves as “less” loyal, meanwhile, remained steady at around 13 percent. Yet, the number of respondents who said they were loyal to “1 to 5 brands” went down from 2019 to 2020 (59.7 percent to 54.7 percent) as did the number of respondents claiming to be loyal to no brands at all (5.6 percent to 2.7 percent.)

How was this change reflected in the data? Those claiming to be loyal to “6 to 10 brands” went up from 2019 to 2020 (26.2 percent to 31.1 percent), as did those loyal to “11 to 20 brands” (6.2 percent to 8 percent), and “20+ brands” (2.5 percent to 3.6 percent).

When asked what sort of actions they would be willing to take for brands they’re loyal to, nearly 68 percent of 2020 survey respondents said they’d join the brand’s loyalty or VIP programme, up from 59.8 percent in 2019. Similarly, those willing to spend more on a brand even if cheaper options existed skyrocketed from 34.5 percent in 2019 to 56 percent in 2020.

During the COVID-19 pandemic, consumers have been more emotionally invested in their favourite brands than in the past, viewing the shopper-brand relationship as more than just a transactional exchange. This also helps explain why, in 2020, survey respondents were more likely to spend more on a brand they were loyal to; it’s no longer just about the money.

According to Andreea Gavrila, creative partner at New Moon, after 2020, brand loyalty became a matter of survival, a powerful key brand indicator that can steer a company towards the right side of the new consumer economy.

“Audiences are moving outside the marketing funnel, changing the way they research and buy products. So, the big challenge for us is not only getting their attention from the moment they’re exposed to the brand to when they actually experience it, but also figuring out how to add emotional triggers to which they can relate on a more personal level. And that hopefully can turn consumers into loyalists,” Gavrila argues.

According to Deloitte’s latest findings, 60 percent of consumers plan on buying more products and services from large companies that positively impacted society during the pandemic.

“My belief is that they are the ones who should invest efforts and resources in protecting the world. Purpose-driven companies are already setting the rules of the game, so I constantly encourage our clients to follow emerging mega-trends that reflect the values, habits, and expectations of Millennials and Generation Z: comprehensive omnichannel strategies, personalised content, a focus on sustainability, and authentic cause marketing,” Gavrila adds.

 

A shift that’s here to stay

Every year, specialists wonder how trends will evolve and how they’ll affect consumer behaviour, but this year, (almost) post-pandemic, this question has been asked more often. It is normal for this to happen, because reality has changed in a shocking manner, and people’s feelings have changed to adapt to this new reality.

“I believe that brand loyalty in 2021 must also be adapted to the reality of 2021 and the first thing to keep in mind is understanding the changes in consumers’ lives: brands need to understand how they live, not what they buy. How have consumers changed? Moving out of cities, online shopping, appreciating affordability and sustainability (EY index 2021). Homes are centres of gravity now; health is a constant concern and the top discussion on the public agenda is respect for basic freedoms. Brands are among the first entities to adapt their discourse and actions and we are already seeing changes in their approach to loyalty,” says independent brand and marketing consultant Alina Tudose.

At the same time, brand loyalty nowadays is not just about repeatedly buying products from a certain brand, but also about constantly praising it and boosting its image through word-of-mouth and online conversations that include brand mentions. Therefore, the upgraded version of brand loyalty includes this publicly-owned image affiliation between consumers and the brands they root for. How can we measure such intricate relationships between consumers and brands?

“Well, the highest level would be when an auto-proclaimed brand ambassador proudly shares their affiliation to the values of a brand on social media through tags, hashtags, and photos with obvious product placement. Meanwhile, the slightly lower level of such brand advocacy would be praising certain product features that are representative for that brand, but while maintaining a more rational approach, focusing on the functional aspects,” notes Alina Galeriu, owner of Galeriu & Partners PR.

 

Engagement and personalisation

So, what should brands do today to get their consumers’ loyalty? Societal changes attract new habits, therefore rewarding customers based on their value, personalising content and offers, as well as increasing the focus on audience value segmentation are now the norm in marketing. According to New Moon’s creative partner, 2021 will definitely uncover new strategies that will be shaped by the “new reality”. In all industries, businesses are already reassessing their priorities and igniting their power by claiming leadership in terms of human-centric brand values, as well as proven records of corporate social responsibility.

“My personal take on this matter is that brands should now address new-age consumers with laser-focused solutions, empathy, and personalised content that respects their need for clarity and their time. Tapping into social conversations also generates valuable insights. In this sense, I recommend that brands use social listening tools to better understand their consumers and find out how their products perform in people’s lives. And most importantly, customer service and customer experience are essential to brand loyalty. This explains why loyalty programmes and CRMs are being redefined, focusing on delivering flexibility and quality from the first touchpoint with the brand,” Andreea Gavrila explains.

According to Alina Galeriu, the real challenge for brands is to reach a point where their consumers are letting the brand become part of their lives and acknowledging that fact. The need for open and authentic dialogue has never been more real.

“Consumers need to feel that brands are engaging them into a conversation, and not just to lure them into buying their products, but to genuinely learn what they like, what they find interesting, what values make them tick. Sharing ethical values with brands is becoming increasingly significant for Millennials and Generation Z. Therefore, corporate policies regarding equal human rights, employee welfare, sustainability policies, and environmental measures to limit pollution and find smarter ways to tackle waste management, as well as cruelty-free policies for brands that operate in the beauty and fashion industries are just a few examples of such hot topics that can make or break a relationship with consumers nowadays,” Galeriu says.

At the same time, as Alina Tudose points out, branded apps that engage consumers can change the conversation. It’s no longer about national research or focus groups, but about real behaviour that we can analyse and understand.

“We’re living in very good times: any brand can now develop its own app and build a community around it. It seems essential to me and I don’t have enough words to emphasise how important it is to know about your customers’ lives. Brand values must be proven by actions and be in line with the times in which we live. One example is sustainability. Yes, brand values are still important: when asked if they were more inclined to be loyal to a brand whose values aligned with theirs, over 80 percent of respondents said yes. (The State of Brand Loyalty 2021: Global Consumer Survey),” Tudose adds.

Other recommendations include finding new ways to be a part of an important and ongoing dialogue, asking community members to share stories, advice, tips, resources, and more. Also, offering useful resources to help consumers get involved. “I would like to see, and I always encourage more activism from Romanian brands. Early access to sales, early access to new products, and tailored offers and recommendations will be likely answers to this question. For many, getting a VIP experience – early access and personalised recommendations – has become significantly more important,” she explains.

Has the pandemic changed the rules on this matter? In Alina Galeriu’s opinion, it has made people more cautious about spending money, but at the same time more eager to live life to the fullest and splurge on themselves. People are having mixed feelings and maintaining a balance though them is the art that brands must learn to master.

“Consumers are reaching for affordable goods, trying to cut down expenses and saving for uncertain times, while social occasions to boost consumption for many industries are less frequent, but at the same time, consumers need to replace activities which are prohibited – such as big events and gatherings or travel experiences – with something else that can bring them joy. Smart brands will find a way to fill the void that consumers feel,” the PR specialist argues.

Looking at this from a branding perspective, Alina Tudose believes it’s now easier for local brands to make their voice heard and have a greater impact. The brand name is not important anymore (only 8 percent say it is important in their loyalty), but the values reflected by the actions of that company, such as sustainability and ethics, are crucial (Business Cloud, March 2021).

“Brands need to take context into account: despite concerns, a majority of consumers (56 percent) would be more likely to shop from retailers that require their employees to take the vaccine (EY, March 2021). We live in interesting times, and people have high expectations from brands beyond the transactional side and, more recently, beyond status. They want empathy, concern for the environment, sustainability, a discourse that’s adapted to the context, and even vulnerability,” Alina Tudose notes.

In different lockdown stages, brands have had the opportunity to commit to a certain narrative and deliver empathy, hope, and better customer experience. And in Andreea Gavrila’s opinion, those who conveyed a humane and authentic message will surely see the benefits in the long run. In Romania, for instance, an EY study showcased how people were increasingly interested in companies’ behaviour during the COVID-19 crisis. As an example, retail players who promoted safety and disinfection measures in stores, companies that donated to the public health infrastructure, and those who proved that they cared for their consumers and – most importantly – their employees attracted the interest of more people. The pandemic has surely changed the way people look at advertising and how they expect to be involved in an open discussion regarding their quality of life and expectations in terms of customer experience.

“A new type of brand storytelling is emerging, which reflects authentic brand values and global belief systems. I trust that we are witnessing a worldwide shift from an ego-centric & ethnic-centric system of beliefs towards a world-centric approach, where we steadily become more concerned about the health of people and of the planet altogether. In this sense, I recommend that brands start segmenting their audiences not only by demographics, but also by value systems. Marketing and social psychology should come together now more than ever in order to understand the depths of consumers’ cognitive biases and mental dimensions and to create appealing offers that trigger people at an unconscious level and ultimately make them live happier lives,” Andreea Gavrila explains.

The shopper-brand relationship is a mix of shared values, engaging branded content on social media that makes the consumer resonate, and corporate policies that prove a brand’s interest in tackling the big topics of humankind. “The rise of self-awareness for every consumer puts a lot of pressure on them to make healthy choices for their own personal brand and maintain a good reputation. Every choice they make, every product they use, every brand that is part of their lives is in fact part of themselves and defines them. Consumers are beginning to understand that their personal brand – open for scrutiny on social media and even offline – is a puzzle made up of tiny little pieces of every single decision they make, as it tells something about them. They still like to brag about the brands they can afford, but at the same time it is becoming increasingly important for them to make responsible decisions,” Alina Galeriu concluded.

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