While this may seem obvious, the truth is that “brand loyalty” often doesn’t make the list of a corporation’s goals. Increased revenues? Check. Increased market share? Sure. Increased profit margins? Absolutely.

Increased brand loyalty? Crickets

While most marketing folks will certainly claim that brand loyalty is of utmost importance, turning that into tangible action is very often a different story. Of course, some industries have long ago figured out that brand loyalty is critical. On the consumer front, loyalty cards, points, frequent flyer miles, etc., are all intended to create loyalty. But do they really? I have, and use, a CVS card, but does that actually make me loyal to CVS? Hardly. I go to CVS because it’s convenient for me and sure, I’ll be happy to save $2 off my next toothpaste purchase.

Ana Andjelic, who runs the newsletter The Sociology of Business, describes loyalty programs like these exactly as they are: bribery schemes that have nothing to do with loyalty at all. They are only about driving economic transactions rather than true affinity for the brand.

To really understand what’s behind loyalty, it’s important to first break it down to what it actually means. Brand loyalty is typically equated to customer satisfaction. Yet in reality, while the two are related, they are distinctly different measures.

True brand loyalty transcends mere satisfaction and motivates customers to want to promote your brand for you.

They tell friends and colleagues. They talk about it on social media. If your product isn’t readily available for some reason, they’ll forego buying it rather than settling for a competitor’s offering. That’s the brand loyalty litmus test.

Customer satisfaction on the other hand is driven by consistently delivering on the functional benefits of your product. That is to say, your offering does what you’ve said it will. Brand loyalty is not driven by delivering the functional benefits of your product or service. Even if you do a stellar job of consistently delivering these benefits, it will not drive loyalty, because loyalty requires more than just doing what your customers already expect your products and services to do. If what you offer doesn’t perform as advertised, then you have no business offering it in the first place. Not to mention, it’s a safe bet that some of your competitors’ products perform just as well as yours.

In what we call a Data Conscious methodology to brand strategy, we think of these in terms of brand value drivers. Some are expected—these are the functional benefits, some are critical, a step above and specific to their needs, and then you have value drivers that are delighters. Delighters are at the heart of brand loyalty.

But before you can even get to brand loyalty, an important precursor needs to take place: customer commitment. Studies show that customer commitment comes in two forms: economic commitment and affective commitment. Economic commitment is when a customer keeps buying a certain product or service because there simply aren’t other good options or the cost of switching is too high. A good example would be the binding contracts that mobile phone or cable suppliers require (here’s looking at you, Comcast). But economic commitment is false loyalty. Many of these customers would bolt in a heartbeat if better pricing and terms were available elsewhere.

Affective commitment is a whole different animal because it’s based on an emotional connection. Customers with an affective commitment stick with certain brands because they are emotionally connected to them. They seek out and choose those brands time and time again.

Here’s an example of affective commitment: I live in a small city just north of Boston and like everyplace, the year of Covid put a lot of small businesses in a very tough place. A local restaurant, The Paddle Inn, was trying to understand how it could remain relevant and created what I would call a perfect affective commitment move. Every Tuesday they do what they call curb-side cooking school. Each online class focuses on one dish and they provide you all the ingredients you need in a bag that you pick up the day before. Then, at 5:30 on Tuesday, you jump into a Zoom cooking class with dozens of other people while their chef walks everyone through, step by step (often in a very humorous way), how to prepare that dish in real time. It’s more than just a lot of fun, it’s community. I will forever be loyal to this restaurant because of all of the surprisingly fun and memorable experiences they’ve created. And you can bet I’ve told a lot of other people about it too.

Did they create this as a loyalty program? I doubt it. They likely were just trying to drum up cash flow on typically slow Tuesday nights. But as a result of creating over and above highly memorable customer experiences they are building a loyal community of customers for the long haul.

There’s a key psychological component at play here. What we are really talking about in brand loyalty is actually memory. When we have an exceptional brand experience it gets lodged into our memory. This in turn gets translated into an emotional connection that all positive memories create. While important, the functional benefits of your product or service just don’t cut it when it comes to creating emotional connections. We don’t record functional benefits into memory, and therefore don’t make an emotional connection.

In other words, when you deliver on just what you are supposed to deliver on with your brand, it’s quickly forgotten. But your brand goes beyond what’s expected and create an exceptional customer experience, it gets lodged into memory. It’s that lodging in the memory that is the spark that drives loyalty. 

So true brand loyalty is a result of first creating affective commitment. How do you do this? Well, for starters, all brand experiences need to align with the brand positioning itself. Experiences are a physical extension of what your brand stands for and why it is distinct. If your brand is solid in both of those aspects, then you can deconstruct the entire customer experience the way it is now and determine where it can be elevated to something that is exceptional, surprising and meaningful.

If, however, your brand positioning and differentiation is murky, you have to first start there and build from that. Trying to create exceptional brand experiences on a brand that isn’t clearly positioned will likely add more confusion and be a waste of valuable budget.

And speaking of budget, this is where marketers need to rethink how they allocate funds across all of their initiatives. A true brand loyalty strategy based on the principals above means that you need to transition a good portion of your focus from communicating expected functional and technical benefits to creating these exceptional experiences for your customers. This requires a reallocation of the budget; In general, I recommend at least 15-20% of your efforts and budget should focus just on your brand loyalty strategy.

Research can help you further fine tune this by first understanding your reputation. For example, if research shows that your brand has a great reputation for delivering on things that are expected (or worse, unimportant), you can reallocate your budget to focus on improving your brand’s performance and perceptions on delivering experiences that delight which will ultimately will be at the heart of your brand loyalty strategy.

Unless you’re in hospitality, chances are creating over-and-above customer experiences that delight could be revolutionary in your industry. It’s an exceptional way to differentiate your brand.

A few tips to help get you started:

If you aren’t delivering the basics consistently (i.e., the functional benefits of your products or services), you have to start there. You need to do that just to avoid dissatisfaction, and you can’t build affective commitment if you don’t meet the basic requirements your customer base expects.

At the core of affective commitment is the practice of creating over-and-above experiences that generate emotional responses that, in turn, get recorded into memory. What this means to your brand depends on the relationship you have with your customers, but the baseline is true, regardless. Ask yourself, what can you do for your customers that will go beyond their expectations? How can you surprise them? How can you anticipate their needs even before they do? How can you personalize their experience? How can you make them smile?

But remember, and this is the kicker, creating affective commitment is NOT about offering deals and discounts. Those might create economic commitment, but the benefits are short lived and will not lead to loyalty.

Creating affective commitment and, consequently, brand loyalty, should be a top focus of most every marketing department. The financial returns can be significant not just from your existing customer base, but the new customers in their circle they undoubtedly will tell about the crazy great experience they had with your brand. Even better, it should rise above that and be a top corporate objective. Creating true loyalty––and then turning that conviction into a marketing channel in its own right––is what makes some brands so cleverly successful.