What Is Brand Loyalty? How to Build & Nurture it
For luxury brands, the significance of returning customers isn’t just about increasing sales, it’s integral to sustaining exclusivity and brand prestige. But how do you build and nurture the kind of brand loyalty that guarantees continued success?
Here, we discuss what brand loyalty is, why it’s important, and 5 ways luxury brands can build it.
What Is Brand Loyalty?
Brand loyalty is when customers continue to purchase from the same brand over and over again, despite competitors offering similar and enticing products or services. Often, this allegiance is built on positive experiences, quality, reliability, and a brand's ability to resonate with its audience.
Effective brand loyalty strategies involve cultivating customer satisfaction, fostering engagement, and creating a distinct brand identity that resonates with the values and aspirations of the target audience.
Why Is Brand Loyalty Important?
Having loyal customers is important for luxury because:
It gives you an edge over the competition, as loyal customers are more resistant to competitors trying to lure them away.
It increases the lifetime value of your customer. Since they consistently choose your products or services, they generate more revenue over an extended period.
Returning customers are easier to convert, requiring less marketing effort and resources to make repeat purchases, thanks to their established trust and familiarity.
Loyal customers often transform into valuable brand advocates who willingly recommend your brand to others—making them a powerful marketing tool.
How to Build Brand Loyalty
Let’s look at some ways that luxury brands can effectively encourage loyalty from their customers.
SHOWCASE YOUR BRAND STORY AND HERITAGE
Customers feel a deep connection to brands with heritage which in turn helps to foster loyalty. Particularly within the realm of luxury brands, having a strong brand story imbues a sense of tradition, craftsmanship, and timeless values, creating an emotional resonance that goes beyond the transactional aspect of a purchase.
For example, Dior uses Instagram to create and build on the storied heritage of their brand. Customers are brought into the story, given exclusive behind-the-scenes content, and made to feel that their luxury purchase was worth it for the inside scoop.
BUILD AN ONLINE COMMUNITY
Brands can use digital spaces, such as forums, social media, etc, to start conversations with customers or provide them with content they want to engage with and respond to. Again, this helps to unite fans of the brand and make them feel as if they’re a part of something.
Let’s use BMW as an example. Their captions on social media are tailored to the car lovers in their audience, with high-tech info and specs about BMW vehicles. Even those who might not be able to afford one of their cars right now will still get value from their content—and perhaps convert to a sale down the line.
MAKE CUSTOMERS PART OF YOUR BRAND STORY
One of the best ways to build loyalty is to make customers feel valued and part of your brand. When customers see themselves as integral parts of a brand's narrative, it creates a more personal and emotional connection.
UGC campaigns are a great way to achieve this—just ask watch brand CLUSE who nailed the UGC brief by asking customers to share their own product photos with the hashtags #CLUSE and #CLUSEwatches.
They gathered over 19k customer-generated images and videos, which they then displayed in a lookbook of customer content on their website. While browsing the lookbook, customers can click on products that catch their eye and be directed to CLUSE’s site to make the purchase. As a result, the brand saw a 19% increase in its conversion rate.
IMPLEMENT LOYALTY PROGRAMS
A surefire way to make customers loyal to you is by being loyal to them in return. Through a loyalty program, you can offer incentives and rewards to encourage repeat business. Alongside discounts and freebies, brands can offer exclusive bonuses such as early access to products or members-only events. This makes customers feel valued and appreciated, fostering a sense of belonging, and encouraging them to keep coming back.
While luxury is often associated with exclusivity, not rewards, many heritage luxury brands have paved the way for smaller companies – and perhaps Lancôme is one of the best.
The cosmetic company’s Elite Rewards program allows members to earn points for every purchase they make, which can be redeemed for rewards. They also get early access to sales and special discounts on occasion. After introducing the program, Lancôme saw a staggering 60% of members engaging with the brand monthly.
OFFER GREAT IN-STORE EXPERIENCES
While online shopping may be the way of the future, luxury brands should not neglect their in-store shopping experience. As so many luxury shoppers like to visit a physical store, this experience needs to make them feel special too.
Luxury brand Farfetch achieved this by introducing AI technology into their stores. In-store screens allow customers to log in and see their wishlist along with recommended styles based on previous purchases. Touchscreen mirrors in the dressing rooms also allow them to request different sizes or styles to be brought to them.
Similarly, sneaker brand Vans leaned into the culture of their brand by creating House of Vans: a store with a skate ramp and bowl, a music venue and cafe, and an art incubator space. While checking out their favorite sneakers, customers can also interact with the brand in a unique—and memorable—way.
Trying to market your luxury brand in an overcrowded market? Block & Tam can help you stand out from the crowd. Get in touch today.
