Global Director of Marketing, leading web development, SEM, SEO, and marketing analytics for StorageMart, family-owned since 1999.
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When a brand offers a unique experience with little-to-no viable competition, marketers can more easily position the product or service as something better, new, disruptive or otherwise different from anything else out there. Yes, it is nice to be special. It is also increasingly rare.
Loyalty has always been important, but in a world of near-perfect information and ever-increasing choices, it is more valuable than ever. In fact, I believe brand loyalty is now one of the few sustainable sources of competitive advantage.
There are countless examples of how brand loyalty has translated into success for companies. Coca-Cola, Nike and Apple all seem to have built their businesses on the back of loyal customers.
Why Commodities Often Require Brand Loyalty Or Luck To Succeed
For a commodity product or service, branding is often the only major differentiator between products. In these industries, competitive branding is important to achieving a larger share of voice. Brand loyalty can be a major driver of this competitive branding. Without brand loyalty, a company has to rely solely on its advertising budget for new leads (and a little bit of luck).
Brand Loyalty As A Sustainable Source Of Competitive Advantage
The benefits of brand loyalty are clear. But what makes it such a sustainable source of competitive advantage? I see three key reasons:
1. Brand loyalty is sticky. Once a customer is loyal to a brand, I’ve found that it is often more difficult for them to switch to a competitor. This customer stickiness can give companies a significant competitive advantage, as they don’t have to continually reinvest in acquiring new customers.
2. Brand loyalty can create a virtuous circle of growth. Companies with strong brand loyalty tend to have higher retention rates, which can lead to higher growth rates. This virtuous circle of growth can then lead to even more brand loyalty and create an ever-growing flywheel of competitive advantage.
3. Brand loyalty is self-reinforcing. Loyal customers tend to not only spend more with the brand but also recommend the brand to their friends and family. This self-reinforcement means that brand loyalty can beget even more brand loyalty, further solidifying a company’s competitive advantage.
Odds are good that no matter what industry or category you serve, the product or service you offer customers is already available from any number of similar competitors. They may be able to outprice, out-supply or simply outlast your brand through brute marketing force alone. This is especially true if you share category space with well-known brands with built-in, loyal customer bases that have been established over years—even decades—of trust built through clarity of communication and consistency in fulfilling promises.
Brand Relationship Over Brand Loyalty
Trust, promises and loyalty: If this is starting to sound like a personal relationship with another person, that’s because it is. Brand loyalty starts with trust, and trust is earned or lost at every imaginable customer touchpoint. From storefronts and websites to digital marketing, traditional advertising, sponsorships, events and any other customer-facing interaction, brands have countless opportunities to reinforce and, most importantly, to deliver on their core promises.
A perfect historical example of failing to deliver is Maxwell House’s Ready-To-Drink Coffee. The company launched this new product in 1990, and it came with the promise of convenience. However, the product came in a foil-lined cardboard box that was meant to be kept cold in the fridge and could not be microwaved in its packaging without setting kitchens ablaze. Maxwell House soon threw its new product out with the grounds. I believe this decision helped the company avoid eroding further trust in the parent brand.
The moral of that story: If your brand promises an easy, convenient experience, it simply must deliver. If your messaging is misleading or your product is cumbersome to use, your product will likely be doomed from the start. For the already loyal customers who appreciate a brand’s predictability, it is easy to see how they could receive a negative new experience as a betrayal of trust. No one wants to be that brand.
Here is another example from our web conversion rate optimization at StorageMart. When we stepped back to evaluate our online rental process, we saw an opportunity to improve the customer experience by making it easier for shoppers to understand what storage unit is available to rent, which discounts may apply and the specific amenities offered at each of our self-storage facilities. After a controlled A/B test that compared the current shopping experience with our proposed improvements, we observed a nearly 18% increase in completed online reservations. By making the customer experience better, companies may be able to directly lift their sales and bottom line, as well as better support their brand promises and goals for growth.
Don’t stop with one improvement, though. You could also consider other customer touchpoints, such as the check-in process if you’re a reservation-based business, bill payment options and even the real-world experience of your brand. In each case, ask yourself the same question: Are we fulfilling our brand promises in the most efficient, customer-relevant way? Continuously look for opportunities to improve so you can find a clearer path toward building consumer trust and brand loyalty. You should continue to iterate, test and adapt based on actionable, data-driven insights that help you live up to your word.
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