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What Is Brand Loyalty in 2021, and How Did 2020 Affect It?

what is brand loyalty 2021“What is brand loyalty in 2021?” remains a question on the lips of many business owners frustrated about 2020’s COVID-19 pandemic. Leaving a trail of kneecapped businesses in its wake, the pandemic swept through the world, causing massive disruption in the business world.

If there’s one takeaway in all the devastation, it’s that brands must learn to shift on the fly to earn their customers’ loyalty. Change is a constant, and crises only serve to underscore that reality.

Those brands that wring their hands, wailing “What is brand loyalty?” to the universe, will never survive. Only those agile enough to sail on the wings of change will soar above any crisis.

Despite the setbacks of 2020, there are people starting up a small business during the pandemic and succeeding, with the help of brand loyalty.

Exactly What Is Brand Loyalty?

Apparently, not a word on the lips of many US consumers in 2020, as a McKinsey study pointed out. During that year, 36 percent of American customers tried new brands. Even more alarming, 73 percent of those customers plan to continue with those new brands, particularly among the young adult and high-income demographics.

Not surprisingly, major brands are the main recipients of the financial rewards this shift brought. With deep pockets and a history of trust, these companies’ stability attracted consumers in search of a safe port.

The Rise of Private-Label Products

However, private-label products – store-branded merchandise manufactured by a third-party provider – also rose to prominence during the pandemic. Many of these often-cheaper products proved themselves to be of equal or better value than their competitors. Their high availability, when many brand-name products were scarce (think: Clorox or Lysol wipes or Charmin toilet paper), led consumers to switch loyalties to house brands.

Convenience, Availability, and Value Become Consumers’ New Priorities

Small- and medium-sized brands who seized the opportunity to manufacture private-label and alternative products rose from obscurity to prominence during the pandemic. Their ability to shift their priorities as demand rose. For instance, craft brews who opened new product lines in the hand sanitizer space demonstrated that they could not only survive but more importantly, thrive in the new normal.

Unfortunately, for companies that kept up the status quo during the pandemic, the McKinsey study points out, many of the people who switched brands plan to stay with their new choice. But there’s a way out. That is, for brands who are now ready to adapt to today’s changing reality.

Rebuilding Loyalty with a Loyalty Program

While a loyalty program won’t replace an agile business model that can respond to change with innovation, it’s an excellent strategy to woo back the customers that many brands lost during the pandemic.

One of the most pressing issues for consumers is maintaining strict hygiene standards. That factor looks to continue through 2021, as the pandemic still rages.

Brands that can position themselves as a one-stop-shop for all the essentials will have the edge during the coming years. Even when COVID-19 ceases to be a major factor, people have gained a heightened awareness of disease prevention strategies.

While brands that had such a business model in place before the pandemic, such as Wal-Mart and Target, have a distinct advantage, there are smaller local brands that are expanding their product selection. For example, a company called Sander’s Markets, a western Pennsylvania grocery chain, has partnered with Ace Hardware to provide their rural customers with building and outdoor supplies in addition to their weekly groceries.

In fact, as the McKinsey study shows, 73 percent of the US population indicate that they are still apprehensive about going out to stores, gyms, restaurants, salons, and other businesses. When they can reduce the risk of exposure by going to only one store, for example, they’ll likely shift their loyalty there.

A successful loyalty program campaign will emphasize that hygiene aspect. Some businesses have added hand sanitizer dispensers at their entrances and exits, while others provide sanitized hand wipes at several locations. Adding attractive perks to pile on the benefits of coming back to – or staying with – the brand can add an extra layer of value to the proposition.

Once a business can shift its product and service options to cover more territory and assure the public that it puts hygiene at the top of its priorities, a loyalty program can help attract former customers to return and check it out. Since budgetary considerations are still a driving factor, their loyalty program should include a discount that rewards customers each time they reach a given amount in purchases.

Use a Loyalty Rewards Program to Help Customers Stay Under Budget

A loyalty rewards program provides tangible benefits for repeat customers or high-dollar purchases. For example, a grocery store could offer customers a $5 gift card for every $200 in purchases.

Or, they could offer free essentials, such as milk or bread, for customers who reach a specific number of rewards points, as does Discount Drug Mart, an Ohio-based pharmacy and grocery chain. After all, essentials still remain highly valued commodities in consumers’ minds.

B2B companies, too, can reward their customers with discounts on merchandise and services. Many businesses still feel the COVID-19 budget crunch and are looking for any way they can find to cut costs. Win back former customers with a loyalty rewards program tailored to their needs.

Add Digital Options for Even Greater Value

A loyalty rewards program can also include non-tangible perks for customers. Providing loyalty rewards program cardholders with delivery services or the option of ordering online can also add value for customers.

Service-oriented businesses can also shift some of their business online. Therapists’ offices offer virtual “couch time,” while musicians set up virtual studios to give lessons and distribute their creations. Offering a discount for those customers loyal enough to take their business online can be a powerful incentive for change.

Explore New Options to Build Brand Loyalty

With a little innovation and investment, brands can find new ways to meet their customers’ needs. Many brands have boosted their level of customer loyalty with a variety of pandemic-friendly strategies:

  • App-based skip-the-line options through an app: Restaurants have responded to the pandemic to give customers the option to order and pay for an in-person dinner through an app, reducing the number of people they encounter to only the waitstaff that bring their meal.
  • Offer chatbot options for customer service: Routine customer service requests often do not require human intervention. Chatbots can streamline the process, freeing up employees for more complex interactions.
  • Provide free shipping for orders over a specific amount: People are more likely to purchase items online if they don’t have to pay for shipping. Offers that allow them to save money and time while staying away from crowded stores increase the likelihood that they’ll purchase more items per order. Providing that sort of convenience is a win-win proposition all around.
  • Develop an emotional connection to seal the deal: What is brand loyalty often depends on the emotional connection a customer feels with a brand. A seamless customer experience coupled with the human touch – even amid a pandemic – builds loyalty like nothing else. As a HubSpot article reports, customers with that kind of loyalty have more than three times the lifetime value as those without emotional ties.

Loyal customers will be more likely to spread the word about your business with bumper stickers and other promotional material. Build your customers’ loyalty, increase the level of customer retention, and when you’re ready, the Nova Custom Label Printing team can help them spread the loyalty love with a broad range of promotional material.

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