Branding has been around, in some form or another, for as long as businesses have existed. The idea of creating a persona around a company’s products, services, and overall level of quality evolved organically, originally through word of mouth and grassroots reputation. From clothing designers and weapons manufacturers to commissioned artists and builders of ancient structures, the highest-quality providers in their respective industries—no matter how fledgling—have always attracted a following, directly impacting their bottom line. Indeed, the oldest brand in the world—a temple and shrine construction firm in Osaka, Japan, called Kongo Gumi—has been in business for over 1,400 years, its success driven not only by its excellent craftsmanship, but also by its reputation for excellence.
Eventually, branding grew beyond its organic roots and became an industry in and of itself—one that now commands billions of dollars in revenue each year, simply for developing other companies’ brands. While spending this type of money on developing a brand might seem counterintuitive, one needs only look at the iconic Nike Swoosh, Mac apple, or Pepsi globe to realize the value of a strong brand.
Building Brand Loyalty
Of course, as businessman Barry Beck stated, effective branding is more than a flashy, recognizable logo. The ultimate goal is to create brand loyalty among consumers, and that requires a holistic approach to brand development—one that is focused on crafting a strong, relatable narrative and cultivating an emotional connection with the audience. Brand loyalty is the bread and butter of modern business, as repeat customers spend, on average, 67 percent more than new customers. When one considers that it is also less expensive to retain existing customers than it is to attract new ones, the value of brand loyalty becomes even more obvious.
Entrepreneurs such as Barry Beck have spent a lot of time studying the effects of the digital era on brand loyalty. The advent of social media, web-based shopping, and general globalization that has come with the Internet has brought with it a number of benefits for businesses. For instance, companies are no longer limited to selling within their geographical area, as they can now advertise worldwide, take orders online (either on their own websites or through aggregate retailers such as Amazon), and ship products almost immediately. This exponential expansion of potential markets has brought great opportunity for the businesses that are forward-thinking enough to take advantage of it.
A More Competitive Retail Landscape
On the flip side, however, the digital globalization of commerce has made the market infinitely more competitive. No longer restricted by proximity to brick-and-mortar retailers, consumers now have an almost endless array of options when it comes to choosing a store. In an era when virtually every type of product and service (including food, vehicles, airline tickets, and medical care) available can be ordered and obtained without leaving one’s home, it has truly become a consumer’s world.
In a market flooded with options, developing brand loyalty has become even more important for businesses hoping to enjoy sustainable sales. At the same time, however, developing brand loyalty has become exponentially more difficult. Gone are the days when a purchasing a punch card that earned patrons their 10th sandwich at half price was enough to lock customers in for life. Loyalty programs must now be digital, multi-channel, easily quantifiable, and provide added value. These can range from simple app-based loyalty programs for local retailers to complex international strategies, such as the Apple Care program for Mac computers. And the larger the purchase price of the product, the more important loyalty benefits become. It’s no longer enough to entice someone with a small-dollar perk—the goal has now become to cultivate complete reliance on the brand.
A Human-Centered Customer Service Experience
Amazon’s Prime program is the ultimate example of a successful loyalty program. Through a combination of dominant market share, an enormous network of delivery providers and supply chain partners, and clever marketing, a company that is essentially just an online middleman—an aggregate retailer that sells other people’s products—has convinced nearly 60 percent of all US households to actually pay for loyalty benefits. Because they are paying a monthly subscription rate for free shipping (and other loyalty perks), customers are now self-incentivized to shop through Amazon, representing a win-win for the company (which earns subscription profits and increased sales volume).
Another factor to consider when it comes to brand loyalty in the digital age is maintaining a human-centered customer service experience. While this might seem paradoxical, the reality is that as the market becomes more digitally driven, the ability for consumers to have authentic human interaction rather than communicating with a bot—particularly during frustrating experiences and crisis moments—is often enough to lay the foundation for long-term loyalty. Thus, while it may be tempting to completely embrace the benefits of a digital marketplace—including the cost savings that come with automation—there is still value in providing a personal experience to potential customers. After all, the core of brand loyalty has always been customer service.