How to measure brand loyalty: Metrics for business success
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How to measure brand loyalty: Metrics for business success

How To Measure Brand Loyalty

Learning how to measure brand loyalty is crucial to your company’s long-term growth. After all, if you don’t have loyal, committed customers, you’ll be left trying to compete with competitors for sales based on factors like convenience, or price.

While dropping your prices and ensuring your customers can access your products or services wherever they are might increase sales initially, it has a detrimental effect on your long-term growth.

Not only will things like average order value and customer lifetime value begin to drop for your brand, reducing your profit margin, but you’ll be faced with the constant threat that another company could offer a better deal than you, and steal your buyers.

To ensure you’re actively cultivating brand loyalty, and taking steps to increase repeat purchases, customer advocacy, and sales, you first need to know how to determine how committed customers really are to your brand.

Based on my experience working with countless brands to unlock the benefits of brand loyalty, here’s your step-by-step guide to measuring loyalty metrics.

What is brand loyalty?

Brand loyalty is a measurement of how likely your customers are to continue buying from your brand and choosing your products or services over competing solutions. Basically, it identifies how likely your customers are to stick with your company and make repeat purchases in the long term.

These days, around 7 in 10 customers say they feel loyal to a specific brand or company, but cultivating and retaining brand loyalty is tricky.

You need more than just an excellent product or service, offered at the right price. You also need to be able to create an emotional connection with both existing and new customers, by highlighting shared values, a specific mission, and a commitment to customer service.

Overall, the level of brand loyalty you achieve depends on a few things, such as:

Your brand equity

The positive or negative associations customers have with your brand. The greater your brand equity, or overall reputation, the more value your customer attributes to your products or services, increasing your chances of higher loyalty rates.

Brand awareness

The level to which customers recognize and understand your brand also has an impact on brand loyalty. You customers don’t just need to be able to instantly identify your company name or logo, they need to be familiar with your core values, your mission, and the brand promise you make.

Brand attributes

Your brand attributes are the traits that customers associate with your brand reputation. Our client Seraphine is often associated with concepts like fashion, comfort, and innovation.

If your attributes resonate with the priorities of valuable customers, you’re more likely to have high levels of brand loyalty.

How To Measure Brand Loyalty

Brand loyalty vs customer loyalty

Notably, the loyalty of your customers and brand loyalty aren’t exactly the same thing. Customer loyalty typically refers to a commitment from repeat customers to keep buying from you because of the benefits they get from each purchase.

When your customer retention rate is high, and you keep making sales, this indicates that your customers are loyal. However, customer loyalty can be easily damaged.

If a competitor comes along offering better product quality, more features, or a lower price, even the most loyal customer base can disappear. Brand loyalty looks beyond how products and services keep customers coming back for more.

If you have brand loyalty, your customers are committed to consistently buy from you because they have a stronger connection with your brand, its values, and overall image.

The benefits of brand loyalty

So, why is brand loyalty important?

The simple answer is that loyal customers are essential to running a successful company.

If your customers are loyal to your brand, you benefit from:

Lower customer acquisition costs

Loyal customers give you repeat, consistent revenue. That means you can spend less time and money on acquiring new customers, without worrying about your profit margins. You can even use a loyalty program or referral program to convince customers to advertise your brand for you.

Increased sales

Studies show that existing (loyal) customers are 50% more likely to try new products and spend 31% more than new customers. Brand loyalty is one of the best ways to boost sales, increase average order values, and boost customer lifetime values.

Protection for your brand

Loyal customers are more likely to forgive companies after a negative experience with the brand. If your marketing efforts go sour, or you produce a low-value product, you’ll be less likely to lose buyers if your customers are already loyal.

Plus, learning how to measure brand loyalty can give you valuable insights into your regular customers, and what they want from your particular brand. This can help you master product development, and even ensure you make the right changes to your brand over time.

When our client “Royal Blind” decided to rebrand, it was their insights into their community that helped them to choose a name and image that felt more engaging, and relevant to their intended target audience.

How To Measure Brand Loyalty

The brand loyalty metrics to monitor

Learning how to measure brand loyalty starts with identifying the key metrics you need to monitor. A lot of companies I’ve worked with in the past assume that they can measure brand loyalty just by looking at the total number of customers they’ve earned, or their customer churn rate.

However, financial data really only helps you measure customer loyalty metrics. Just because a customer keeps buying your products, doesn’t mean they’re loyal to your brand.

Your current customers may only be loyal to you until another company offers them a better version of your particular product.

The only way to know whether your customers are showing emotional loyalty to your brand is to collect genuine insights from your satisfied customers, usually with surveys or focus groups.

Here are the top brand loyalty metrics you should be monitoring with those surveys.

1. Customer satisfaction

Measuring customer satisfaction score (CSAT) rates is a great way to track both brand loyalty and customer loyalty at the same time. If customers are happy with the service you offer, or the quality of your products, they’re more likely to keep buying whatever you offer.

Measuring loyalty with customer satisfaction surveys also helps you to identify which factors are making customers “loyal” to your brand, rather than just your products or services.

With customer surveys, you can ask about elements of customer satisfaction such as:

  • Customer experience: How satisfied are your customers with the experience they get from your company? Do you offer excellent customer support? Do your buyers love your marketing campaigns, and think they accurately represent your products?
  • Customer effort score: How easy is it for customers to interact with your brand? Do you have a lot of positive reviews about how quickly customers can set up and use their new products? Do customers spend a lot of time struggling with the onboarding process?
  • Brand awareness: How much do customers know about your brand? Are they familiar with your goals, mission, and vision? What attributes and characteristics do they associate with your company?

2. Brand trust

Ultimately, you can’t have brand loyalty without brand trust. In fact, 7 in 10 customers will only ever buy something from a company they can trust. While brand trust is crucial in every industry, it’s particularly important if you’re selling something that has a significant impact on customers.

For instance, our client Adelio Partners runs an asset management organization. They need customers to trust that they have their financial interests at heart, which is why they chose to include the word “partners” in their name, to show their commitment to collaborating transparently with clients.

How To Measure Brand Loyalty

Even outside of industries like finance, and healthcare, earning your customer’s trust can help to reduce marketing costs, and the average time it takes to convert a customer.

One of the most direct ways to measure customer trust is to talk to your buyers, ask them:

  • Whether they trust your brand, and what they trust you to do for them.
  • How you earned their trust, such as through creating a consistently positive experience with your customer service team, or following up on your promises.
  • How you can keep their trust, such as by protecting sensitive information, being transparent with your marketing strategies, and addressing potential concerns.

3. Brand esteem

Brand esteem measures the respect a customer has for a particular brand. It basically builds on the concept of brand awareness, looking beyond the image and personality of your brand, to focus on the key values that make your company appealing to your target audience.

As an example, one of the things that makes Apple so successful is its high level of brand esteem. Customers love Apple because they associate it with things like high quality products, constant innovation, and a commitment to delivering unique customer experiences.

To identify the brand esteem the average customer holds for your company, ask your current customers questions like:

  • How would you describe our brand if it was a person?
  • What resonates with you most about our behaviors as a brand?
  • What do you prefer about our brand over a competitor?
  • What do you believe competitors do better than us?

4. Perceived quality and value

A customer’s perception of the value or quality of a brand directly connects with that company’s “brand equity”. If you want to learn how to measure brand loyalty, you need to know whether your customers think they’re getting genuine value from your company.

Look at our client Accurist London, they’d struggle to retain clients if they promised customers high-quality, luxurious accessories that didn’t live up to their expectations.

They’d also have a hard time attracting new customers if they were charging prices their customers considered unreasonable. The company thrives because it delivers the value and quality customers expect from a luxury watch maker.

How To Measure Brand Loyalty

The easiest way to measure brand quality and value is to ask members of your target audience:

  • How much would you expect to pay for a product like ours?
  • What would prevent you from buying our product or service?
  • How would you rate the quality of our products or services?

You can also ask your current customers how reliable they consider your brand to be, and whether your products live up to their expectations.

Another way to monitor brand quality and value with simpler metrics, is to look at things like:

  • Redemption rate: How often customers take advantage of your offers and deals?
  • Participation rate: How many people use your product or service consistently?
  • Customer churn rate: How many customers stop using your product?

5. Net Promoter Score

Finally, Net Promoter Score, or NPS is one of the best tools you have when learning how to measure brand loyalty. It basically looks at how many customers are actually willing to recommend your products or services to family members, friends, and contacts.

If you know your customers are happy to recommend your company (rather than just a particular product or service) to other people, you know they’re loyal to your brand.

The good news is measuring NPS is simple. All you need to do is survey customers and ask them to rate on a scale of 1 to 10 how likely they are to recommend your brand to another customer. Organize responses into promoters (scores of 9-10), passives (7-8) and detractors (0.6).

Subtract the number of detractors from the percentage of promoters you’ve earned, to get your NPS score.

How to measure brand loyalty (and improve it)

Measuring brand loyalty is one of the best ways to prepare your business for success. Insights into how loyal your customers are can help you with everything from creating better products, to increasing your market share, and boosting your total revenue.

Fortunately, the process is pretty simple:

Step 1 – Define the brand loyalty metrics

Decide what you’re going to be tracking, from customer satisfaction scores to the total number of customers that stay with your brand over a given period.

Step 2 – Design your survey

Create a survey that asks clear questions about your customer’s brand loyalty. Don’t focus too much on specific products or services. Instead, look for insights into how much your customers value the overall experience your brand can offer.

Step 3 – Examine the responses

Look carefully at the responses you collect, as well as additional metrics, such as active engagement rate, customer engagement score on social media, and revenue, for an overall insight into brand health.

Step 4 – Act

Use the insights you’ve generated to find ways to boost your brand loyalty.

For instance, if you notice that customers attribute a lot of value to your brand, but don’t trust your pricing structure, create marketing campaigns that validate the prices you charge, and highlight your unique value proposition.

Keep in mind, measuring brand loyalty isn’t just something you should do once. It’s a good idea to keep a close eye on how much customers love your brand over time. Use social listening tools to collect insights, survey brand ambassadors regularly, and watch your brand reputation.

If you notice a dip in your brand loyalty score, consider whether it might be time to work with a company like Fabrik, on a refresh, or rebranding strategy.

Fabrik: A branding agency for our times.

Stewart Hodgson
Co-founder
Stewart Hodgson
Co-founder
Our co-founder, Stewart, is responsible for content strategy and managing Fabrik’s publishing team. It’s up to Stewart to bring Fabrik to busy marketers’ attention. As a regular contributor to Brand Fabrik, Stewart creates articles relevant to anyone in branding, marketing and creative communication.

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