In Pt 1, we discussed what brand loyalty is, and why people want to be identified and associated with a brand. Here in Pt 2 we are diving deeper into customers’ decision paralysis in a world of too many choices, and why brand loyalty can fill their need to simplify their lives. We will also discuss what kinds of loyalty programs can reward and sustain brand loyalty.
Both Pt 1 and Pt 2 will become part of a chapter in my (Joanne Z. Tan) upcoming book on brand building. This book will discuss customer loyalty and other related subjects in more depth and width. Subscribers to 10 Plus Brand Newsletters will have exclusive access to purchase below list price, and an exclusive sneak preview. Subscribe to the Newsletter
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AI will level the competitive playing field for many products and services by reducing costs across the board.
When lots of B2B expertise will be at one’s fingertips, what differentiates one service from another is personalized customer experience, and loyalty programs. For B2B service providers (such as business consulting, leadership coaching, accounting or law, financial advisory), the age-old tradition of shying away from loyalty programs will make you fall behind.
We are living in a world with too many choices, leading to decision making paralysis and less satisfaction on the part of customers. A TED talk by Barry Schwartz, author of “The Paradox of Choice – Why More is Less” explains why people are less happy with more choices.
To alleviate consumers from the stress, time, and money in having to choose from too many choices, brand loyalty SIMPLIFIES their lives.
Ask yourself: If you have three hours, would you rather be doing something you really enjoy, or spending on trying different styles of pens, or breakfast cereals, or whatever?
This is how Steve Jobs simplified his decision making: Remember he always wore a particular style of black turtleneck? Notwithstanding that Jobs was the pickiest in choosing furniture, clothes, and other things in life, once he settled on a particular style, he ordered a huge quantity of the same black turtleneck, enough to last his entire life, and never bothered thinking about what to wear. It freed his headspace to dream and think about more important things, such as the world’s first Iphone.
Today’s world floods us increasingly with too many choices, large and small, in daily life. Our minds’ limited decision-making capacity make us yearn for simplicity. If a brand can give customers the ultimate gift of simplicity, reliability, trust, and freedom to pursue their passions, customers will stick with a brand – be it a consumer brand, a professional or service brand, B2B, B2C – for as long as the brand holds its value and evolves with them and with the world.
To earn customers’ brand loyalty for the long term, the burden is on the brand to deliver:
Value – Unfailingly deliver functionality, quality, and customer service. Your product or service is to solve specific problems and make life easier and more enjoyable. If your product or service is consistently relevant to your customers among the ceaseless changes of the modern world, through high and low your customers will stick with your brand.
Uniqueness – More than making them feel safe, the brand makes them feel proud of owning something exclusive. There can be an associated level of glamor, stature, and prestige.
Innovation – As long as a brand is constantly innovating, not just with technology but also new ways for people to think, experience, and live, the brand will never become obsolete. When a brand strives to delight customers with pleasant surprises, their customers appreciate the efforts and will tolerate any minor shortcomings.
Trust – More than just a good deal, customers want brands they can trust yesterday, today, and tomorrow. They want CONSISTENCY in a brand’s performance. The highest level of trust that can be bestowed by loyal customers is that they believe the brand will always lead the market.
Loyalty programs to reward customers. See discussion below.
The no-rewards approach: One school of thought is an absolute “no rewards, no loyalty programs, no sales, no deals” approach, which presumes tremendous faith in your brand and your products and services. Apple, for example, has rarely offered any rewards, loyalty programs, or sales. Apple does not lower prices on anything, never offers “buy one get one free”.
If you are confident that your product or service is not only unique and indispensable, but also of the highest quality in a competitive market, that people will pay a premium for it no matter what, in other words, on top of the food chain AND will stay there with monopolistic market power, then you don’t need to reward customer loyalty with any incentives. You don’t need to read on.
But the vast majority of aspiring brands are not established behemoths like Apple, with a commanding market share, and can thrive without loyalty rewards. If you want to adopt the “no rewards” approach, ask yourself: Is my perception of my brand power congruent with reality? Is my product or service indispensable and unique? Can I afford to lose loyal customers who do expect loyalty rewards, or ask for package deals or specials?
Loyalty program and rewards: At the beginning of your brand journey, when you have no brand recognition, but you need customer loyalty to keep your cash flow going, while you grow your brand awareness and revenue, offering brand loyalty programs is just like rewarding angel investors who invest in a potential unicorn with the most ROI from their risky investment: early customers of yours who stay on with repeat purchases are rewarded by your loyalty programs and preferential special prices (not “discounts” – I will address the difference later).
As your brand grows and gains more market share, recognition, and clientele, rewarding repeat-buying behaviors will convert buyers into loyal customers, whether they are buying the same products or services over and again on a regular basis, and/or additional new lines of products or services.
Misused loyalty rewards: But using discounts and rewards too much, too often, all the time on everything can dilute a brand or even be self-defeating. Macy’s and CVS are examples: Macy’s offers sales with 10-30% off almost every month in a year. CVS’s sales receipts always print out discount coupons with every purchase. Buyers wonder if their prices are ever honestly set at all. Macy’s and CVS have gotten their customers into the habit of expecting discounts every time, for anything. Customers can never trust their listed prices and hardly buy anything that is not discounted. If they have to pay full price, they feel cheated.
“Discount” can be a dirty word in brand building. Most people associate “discount” with “cheap”, “low quality”, “not valuable”, or at least not sold at the full value of a product or service.
For B2B service providers and certain types of B2C products and services, discounts invite clients to think less of the quality and trustworthiness of professional advice or coaching services, therefore, most of the time, discounts are not good loyalty rewards.
Any other ways to show your appreciation for your long term clients who repeatedly buy from you?
Package deal: Why not offer your loyal and repeat clients a package deal, consisting of multiple items in different areas of services, to be sequentially delivered over a period of time, where each item in the package will be at a lower price than a la carte? This way, it gives the client the incentive to continue paying for related services (provided that they need all the items in the package, and the items will be delivered at high quality.) Just don’t call it a “discount” since you are not discounting your services but offering them to buy more related items at a “package price”, or as a “loyalty program”.
Make sure you let your clients know how much they save from your package deal vs. a la carte at a higher market price. Caveat: Customers can verify the market price for each item in the package. Do NOT inflate your a la carte prices first, then discount them back to the honest prices. You will lose your credibility and your client’s loyalty.
Make sure you construct your service contract in a way that allows clients to leave if and when they don’t find your services satisfactory, or if any situations change, you and your clients won’t get stuck in a package deal.
Client appreciation events: B2B services can also go above-and-beyond to make your loyal customers feel special, such as client appreciation events like attending ball games or music events together, summer BBQ parties, holiday celebration lunch or dinner, and individualized birthday gifts, – they don’t need to be extravagant, or exceed regulatory compliance limits. The point is to show your appreciation for their loyalty.
B2B services are based on relationship building and trust. As in all human relationships, expressing appreciation for each other’s loyalty is not to be equated to manipulating buying behaviors based on pressure, fear, or dishonest pricing. Your loyalty program is to reward your clients’ brand loyalty to your HIGH quality products or services without discounting their value.
For B2B service providers, gaining brand loyalty is a high honor and a high mark for your success. In the age of AI, B2B service providers need to be innovative and creative with devising loyalty programs and rewards to maintain and grow their happy clientele, with high quality customer experience.
To learn about why and how to build brand loyalty, here are the blogs previously written by Joanne Z. Tan: “Use Brand Culture to Catalyze Workplace Culture Change” and “Brand Building, Organizational Culture, Brand Loyalty”.
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We at 10 Plus Brand help companies build, grow, and manage B2B brands, as well as brand loyalty programs. Joanne Z. Tan is a globally recognized brand strategist, brand coach and consultant. She leads 10 Plus Brand, a multiple award winning, full service brand building, brand marketing, branding agency to build and market both business brands and personal brands. Please contact us if you need more information. Thank you.
Both Pt 1 and Pt 2 will become part of a chapter in my (Joanne Z. Tan) upcoming book on brand building. This book will discuss customer loyalty and other related subjects in more depth and width. Subscribers to 10 Plus Brand Newsletters will have exclusive access to purchase below list price, and an exclusive sneak preview. Click here to Subscribe to the Newsletter.
© Joanne Z. Tan All rights reserved.
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