3 Companies That Built Brand Loyalty (and How They Did It)

With online shopping and effortless access to information, brand loyalty can often seem to be in short supply.

The numbers seem to tell the same story - 73% of US customers today are prepared to switch brands in at least one shopping category. Yet, there are some brands that have still managed to prevail among the stormy winter of customer atrophy.

Read on for three killer brand loyalty strategies to kick start your customer retention program.

Why Is It Important To Build Brand Loyalty?

Acquiring New Customers Is More Expensive Than Keeping Existing Ones

Because customers are exposed to more options than ever before, standing out from your competitors and converting new customers can require a substantial amount of resources. In fact, Forbes magazine found that the cost of new customer acquisition can be up to 5 times that of retaining existing ones. With this in mind, building brand loyalty among your existing customers is more financially sustainable in growing your customer base.

The Customer Decision Journey Is More Complicated Than Ever

Traditionally, the process of engaging a customer has been perceived in the form of a “marketing funnel.”

Consumers enter the funnel by considering a large number of competing brands, and methodically reducing the number of brands they’re considering over time. 

The consumer moves through the funnel when they narrow down a single choice at the purchase stage. 

Assuming that the purchase experience is generally positive, the customer then proceeds to develop loyalty towards the brand. 

Because customers today are equipped with a number of product choices and digital channels, the customer decision-making process is more complicated. According to McKinsey, this process can be visualized better as a circular journey, rather than a funnel. 

(Source: General Assembly)

Even after making a purchase, customers tend to re-evaluate their purchase decision and experience. Customers are able to compare their purchases with alternatives and share their experiences. 

This entire post-purchase experience helps the customer decide whether to remain loyal and make a future purchase or move on. 

So how exactly should brands influence loyalty? Here are 3 companies that have successfully built legions of loyal customers, and the strategies they used to make it work.

Spotify 

Building Loyalty Through Hyper-Personalization

With more than 100 million paid monthly subscribers, Spotify is by far the most popular music streaming service in the world. 

Spotify’s hyper-personalized customer experiences have been a key driving force in retaining its loyal customer base.

1. Actively Understand Customer Preferences

There are a few key ways that Spotify delivers personalized experiences, including:

• Actively monitoring the content that customers listen to in-platform 
• Using listening-related insights to deliver personalized recommendations

These strategies empower customers to discover new content tailored to their preferences, which continuously enhances the customer experience.

2. Empower Customers To Share Their Experience

Spotify also actively creates opportunities for its customers to share their unique experiences with the rest of the world.

Through “Spotify Wrapped,” Spotify provides customers an overview of their streaming activity in the form of an eye-catching graphic card. This immediately creates an opportunity for users to share their unique selves with the rest of the world. 

The presence of such user-generated content on social media also allows Spotify to grow its brand presence among prospective customers, and retain current customers by teasing new or exciting features.

Razer 

Building Loyalty Through Obsessive Customer Focus

Razer - a world leader in high-performance gaming software, and self-proclaimed gamer lifestyle brand - gained global recognition in the gaming space by building a cult following over the past two decades. Despite existing in one of the most competitive industries, Razer managed to differentiate itself by bingeing on insights into customer needs. 

3. Prioritize Customer Needs Over Trends

Since its inception, Razer’s slogan “For Gamers, By Gamers” has emphasized a specific focus on the gaming community. Its strict adherence to this core principle has allowed it to sustain a strong brand mission and distinctive positioning. A prominent example of this is its release of the Razer Blade, a high-end laptop optimized for gaming use.

At the time of the Razer Blade’s release, PC gaming was in decline, but Razer pushed on with the release of the product based on customer feedback. This decision allowed for the Razer Blade to become one of the most popular gaming products in the market, and for Razer to maintain the affection of its loyal customer base.

4. Actively Engage Customers

Razer also distinguishes itself by maintaining an omnichannel engagement effort. By utilizing all major social media and gaming platforms, Razer maintains an extensive online community, which it uses to gain customer insights and feedback. 

Even Razer’s CEO Min-Liang Tan is known for personally interacting with customers and fan communities through these networks.

Sephora

Building Loyalty Through Customizable Rewards

With more than 25 million registered members, Sephora has one of the most successful customer loyalty programs in the beauty space. The company uses tiered and customizable rewards to provide personalized experiences for its members.

5. Build A Sense Of Exclusivity

The Sephora Beauty Insider program is structured as a tiered reward system. As members increase their annual spending, they are able to achieve higher tiers of membership. Higher membership tiers then provide access to exclusive rewards such as limited edition products, or member-only events. 

By offering exclusive access to sought-after rewards, Sephora provides something for customers to aspire towards. This effectively encourages them to increase in-store purchases and stay engaged with the brand for a longer period of time. 

6. Empower The Customer With Personalized Choices

Another key differentiator of the Beauty Insider program is that customers are empowered to best utilize it for their own needs. 

While customers accumulate points just like other traditional customer loyalty programs, they also have complete control over point redemption. This means customers have access to perks that are actually aligned with their interests.

Sephora takes it a step further by creating unique Beauty Profiles for all of its members. Profiles include information on customer beauty needs and preferences and recommendations for products based on those stated needs.

Implementing Brand Loyalty Strategies

Spotify, Razer, and Sephora each have their own approach to increasing brand loyalty. Yet, we can see that a common thread runs across all three strategies: a keen understanding and emphasis on customer needs. 

Want to really understand how customers feel about your brand? Check out our article on different places you investigate for customer feedback!

‍