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living Loyalty
e all know the value of a loyal customer. We also know the 80/20 rule marketers invest heavily in their most-loyal customers, who in turn drive
The 2011 Brand Keys Loyalty Leaders study confirmed the importance of emotion to foster brand loyalty. According to the studys director, Robert Passikoff, loyalty is absolutely driven by emotion, and this year consumers are absolutely looking for emotional connections more than ever before. Moreover, according to a recent Boston Consulting Group study over a 10-year period, brands that evoked a stronger emotional response drove greater loyalty, greater volume and higher prices (20 percent to 200 percent higher than less-emotive brands). But there are significant barriers to making emotional connections between brands and consumers. Marketing strategist Jack Trout pointed out in Differentiate or Die that our minds cant cope with the clutter; we have a pre-wired physiological limitation to processing stimuli, especially in a world with more than a million new web pages joining the internet every day. Ours is a world where most of us have seen more than 140,000 commercials by the time were 18 years old. S i r r i c H a r d S a n t i c S Sir Richard Branson is among the most prominent proponents of the maxim that emotional connections drive brand commitment. According to Sir Richard, feelings and feelings alone account for the success of the Virgin brand in all of its myriad forms ... everyone likes to have fun and feel part of something bigger than themselves. Sir Richard is also adept at breaking through the clutter. I had the pleasure of closing Times Square and dropping him off the side of the Bertelsmann building, riding a giant mobile phone, dressed in a nude muscle suit with a phone strategically covering his nether region all done to launch Virgin Mobile in the United States. His antics have also included driving a tank down
As a recent Conference Board survey of top CEOs confirms, driving brand loyalty has never been more important. According to the survey, CEOs see brand loyalty ranking first among management concerns. Why? Because, as Frederick F. Reichheld pointed out in The Loyalty Effect, increasing the size of a typical brands top-tier customer base by just five percent can drive a 25 percent to 100 percent increase in profit. Increasing a brands base of loyal consumers requires brand commitment the engaged, active selection and re-selection of your brand by consumers. Committed consumers will go out of their way to find your brand. They are less price-sensitive when given the choice between your brand and others. Committed consumers are more likely to try new product extensions and require less investment to induce repurchase, allowing you to focus on acquiring new users. As brand loyalists, they will also advocate and evangelize your brand to others. But how do we create that loyalty? From what pool does brand loyalty spring eternal? Is there a formula to follow in creating the perfect mix of price, product, place, and promotion? What makes someone stay loyal, despite aggressive competitive activity? Being loyal to a certain brand belonging to that brand family is grounded in Maslows hierarchy. As human beings, we have an innate need to belong and it is emotional connections that fuel that sense of belonging.
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BRAD BRYEN is executive director, experiential marketing, G2 USA, with expertise in integrating experiential, retail and shopper marketing, promotion, interactive and customer relationship management. He may be reached at bbryen@g2.com.
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