Building Your Brand - Customer Loyalty

For the third (ok, fourth if your being clever) article in this series of "building your brand" I want to focus on your customers and how you can change certain aspects within a brand (and actions it makes) to make the consumer more receptive to the brand, including products or services you offer. In the recent recession (and I say that knowing the UK has shown economic growth for the last quarter of 2009 and first of 2010) I watched carefully as brand after brand crumbled in the UK and around the globe, including many financial brands which most people were here to stay. Other than the banking fiasco causing the recession around the world, another thing which helped fuel the economic depression (and causes issues for many companies) is that prices are being driven lower. The reasons for this are many and varied, a number of companies believe that the customers have "been empowered with information" and therefore know where to go to compare prices or get it cheaper. In my view this is not so much the case, the drop in prices is down to a lack of strong brands, in the 90's and early 00's big brands such as Nike, Adidas, Microsoft and Apple dominated the global markets in many ways, looking at the same brands now adidas is slowly dieing, as are nike and microsoft, apple remains strong due to its market position as being "elite" and not so much for the ordinary punter... they price themselves in the upper market. As I said in my previous post about brand position:

The more obvious the connection is between the brand and the prospect’s daily activities, the greater the chances are that the chances of selling the product or service you are offering.

I recently did some research for these posts (as I do with all posts I make) and subsequently did an analysis of what I found and any data figures I could compare - and it is the 3 significant findings about customer loyalty I want to now concentrate on. The interesting part of this is that these cover all markets and industries not one specifically, the mindset of the consumer the world over doesn't change very much in respect to these ideas.

Price Advertising = FAIL!

Time is the sales driver, not the price. (ok over generalising here but I will go into this in depth in a post in the future). Lets take the following common examples, when your reading these think carefully about if the product mentioned is changed to something you use on a regular basis what you would do.

Example 1

Slimming Pills - Buy 150 Capsules and Get 28 Free - £29.95

Example 2

1 Months Supply of Slimming Pills, Clinically Proven to Show Results in Less Than 3 Weeks of Continual Usage - More than 20% FREE - £29.95

Example 3

Slimming Pills - Proven to Work in Under 3 Weeks - 20% extra FREE - £29.95

These examples are taken from a discussion with a client selling diet pills Kaloss Trimmers

I admit these aren't the best examples but lets unpack them. Example one is too the point and shows the sale clearly and effectively, but its lacking a real pull. Example two is very much wordy and as such is wasting the users time from the start, a claim of more than 20% free ... so how much is free? also from a good point of view there are 2 time focuses, they do not align (1 month and 3 weeks, so whats the extra week for?) this is a messy advert and another bad example. The third example is clean and concise, it says what the product is, has a time attached and is proven (something easily overlooked in example 2) and declare 20% extra free - it is the combination of a short time period (shorter than most slimming pills) and getting something "extra" for free that pulls the consumer in, and it is this small wording change that can make a difference between them buying from you at £29.95 and from someone else with a similar product at £19.99 .... its about evoking the emotion of feeling that it will work, and you trust the product. Which neatly brings my to my next point ...

Emotional Advertising Reduces Price Sensitivity

This may sound a little strange to even those who are market hardened and think they know their customers. But this is a trend that is becoming much bigger and more important on the web and tv, and it is only in the last year that it has really began to boom on the web (& tv) and also pick up in other media such as newspapers and adverts in supermarkets.

Evoking emotion in campaigns makes the advertising campaign around twice as likely to generate much larger sales figures than the "rational" (and boring) advertising of old.

If you can evoke certain emotions or memories, such as making an older person remember a good time in their childhood with an image or an old saying, my research shows that these campaigns does something quite amazing and powerful. The emotional campaign reduces price sensitivity, and means that a brand can take up the "premium" space in any market place.

A great example of this as I've already mentioned is Apple. In theory the products that they provide are based on the same hardware that E-machines, HP & Dell provide however they prices are much higher, this in part is due to the operating system being "great" (though i don't think its that good) and the stylish nature of the products. The products and brand evoke a feeling of being executive and stylish - it makes you feel its high quality and therefore they can ask a premium price for the products they offer.

Loyalty Programs - Bringing Outside Inside

Again I apologise for skipping some detail here but there will be another post in detail about this specific topic, so I will cover the basics here.

One aspect that many brands use to inspire loyalty and promote a brand is to give a loyalty scheme, for example Tesco ClubCard and Nectar your build up points by shopping at various outlets and then you spend the points in store or online. Ok you've giving away 1 to 5% (on average) of your sale however you can be sure they will come back and spend that and it will encourage them to build up points because they want something free, we all do, its human nature. So you will get those sales, and if you make it one hundred points = £1 as with tesco the person has to spend £100 on a 1% basis so to get £10 back you spend £1000 (some nice sales begin to build up) and because the scheme only gives you so much and the person wants something nice for free they may be willing to pay any difference upto the amount of points again ... so you get approx 50% of a sale ... it all builds up.

Other schemes like affiliate schemes mean again you give away the same amount in sales to a person as commission for bringing you a sale, or you give them a  fixed amount say £5 per sale of a TV or Laptop. They do the leg work for you promoting your brand and website, and research shows if you let these people use the affiliation themselves they will also shop with you simply because again they are getting "something for nothing".

So overall the three points above are things you need to consider in order to create a real base of customer loyalty. If you have any more ideas let us know by leaving a comments or tweeting @andykinsey

Finally - This article as with all of our articles is bought to you by and in association with Andy Kinsey Designs of Manchester whom have today (14/4/10) relaunched their home website andykinsey.co.uk - Again tweet your opinion of the site to @andykinsey