Sticking Points: Brand Loyalty Trend Report

Brand loyalty is about the non-financial reward of an exchange of goods or services. We are loyal to brands because their interests align with our own. Sometimes those interests are purely practical—we want the same outcomes—but often they are cultural, emotional, and deeply rooted in the identity of individuals and organizations.

By their nature, consumer brands have transactional relationships with their customers. Price, value, quality, and aesthetics are primary drivers and these brands focus on those discrete qualities. Points, giveaways, and freebies can be useful here, focusing more on the value-driven side of the equation and less on non-financial incentives.

In professional services, trusted, long-term relationships take the lead because service provider and client goals are intertwined. These organizations invest heavily in loyalty built on personal relationships, and often brand and design fall to the wayside. This is a missed opportunity.

Real estate and law, often brand-starved categories populated by corporate identities made up of a string of last names, have found themselves shaken up by brand-savvy newcomers. Compass was a real estate tech startup before breaking into brokerage, where it stands out with its contemporary design, digital-savvy, and a $4.4B valuation. Similarly, Axiom’s offering is built on legal tech, from which they have built a 1,300+ lawyer firm that rises above the sea of acronyms in the legal space.

Brand loyalty initiatives aim to establish long-term, mutually beneficial relationships between customers and brand. These initiatives, executed within a unified and ownable brand system, build connections on an individual, community, and ecosystem level that makes relationships stick.

 

INDIVIDUAL CONNECTION
Whether you are selling leather goods or legal services, at the core, you are selling to an individual. Connecting to the emotional, social, and cultural interests of that person can create bonds that drive loyalty.

Cravath excites ambition. Cravath’s employer brand centers on hiring the top students from the top law schools and training them through a rigorous process. This exclusive position engages premium talent, but it also invites clients to identify themselves with the most prestigious firm in the country.

Patagonia inspires altrusim. Patagonia generated considerable earned media attention when they made the decision to donate their $10M savings from corporate tax cuts to environmental groups. Social responsibility is a difficult value to tout without looking disingenuous, and third-party validation brings authenticity to this position.

Forrester Consulting encourages clarity. A report from Forrester shows transparency in pricing and product details as the leading driver for reengagement in the B2B space. Clients want to know what they are getting for their money. This is driven by a desire to meet business goals, but it is also connected to the need to trust their relationship with the person on the other side of the transaction.

GOOP and Shinola personalize commerce. Hip, premium consumer goods brands Goop and Shinola do not offer rewards programs, but both use informal VIP groups as ultra-premium focus groups. High-value customers are consulted both to strengthen those individual relationships and to learn about the deeper desires of the brands’ communities.

 

COMMUNITY CONNECTION
Creating community helps brands build enduring relationships. Changes in price can send casual customers scurrying, even when they value a product. When a brand relationship is (or feels) symbiotic, some of that elasticity can be tightened. Brands tend to create communities at three levels: internally with staff and partners; between the brand and its customers; and finally, between the customers themselves.

Gin Lane and Red Antler align incentives. Design agencies Gin Lane and Red Antler often work with startups. For promising clients they take equity in the companies, as Gin Lane did with Harry’s and Red Antler with Casper. By aligning themselves with their client’s financial goals, these agencies demonstrate their commitment to the success of the services they provide and integrate themselves in the communities of their clients.

Marriott is where the party's at. In 2017, Marriott was the first brand to take over several safari tents at Coachella for their new Moxy Hotels. This brought them into a new context, to meet customers where they are and associate the fledgling brand with an already-thriving community. By offering their space as a branded gathering place, Moxy made a statement about the brand’s role within this community.

Pottermore has a life of its own. J.K. Rowling created the mother of all fan communities with Pottermore in 2008. The site worked closely with existing Harry Potter fan sites and community leaders. In its early stages, it functioned much like a guerrilla fan page, sending users on challenges around the web and offering leaks, but little new content. As the site professionalized, it grew into a standalone brand, distributing e-books and expanded content. In 2015, the site was redesigned into a more polished publishing platform for exclusive content and experiences, linking the fan community of 11 million monthly web visitors and $10M annual revenue.

Starbucks and Parachute have a light touch. Starbucks and Parachute created on-brand fan communities using different tools. Starbucks sponsors a secret Facebook group called Leaf Rakers Society for lovers of the fall season. This group is lightly branded but centers on the cult of Pumpkin Spice. Parachute, a luxury home goods startup, inserts a prompt in their package deliveries to share photos of your purchase in action on Instagram. Photos are also gathered onto the company website. This creates both branded and unbranded communities for brand advocacy, product discovery, and new customer referral.

 

ECOSYSTEM CONNECTION
No brand is an island. And no customer wants to feel trapped in a relationship. This is particularly important in professional services and large scale consumer purchases because switching costs can be daunting from the outset. Providing an ecosystem of offerings, inside and outside of a brand, makes it possible to retain engagement and build a dynamic and complex relationship with customers over time.

Singapore Airlines and Hilton for infrequent travelers. The high cost and time commitment of frequent travel means many consumers do not reap the benefits of travel rewards programs. To maintain interest, Singapore Airlines’ Krisflyer members can use their points at various retailers, and Hilton Honors members can redeem points on Amazon. These programs expand the brands’ ecosystems and bring value to these infrequent travelers.

Module Housing makes prefab personal. Module Housing creates modular, pre-fabricated housing that can be bought in stages: a one bedroom for a young couple; a second floor added with the birth of a child. The modular system locks you into a long-term relationship with Module, but their expanded ecosystem of discounts and rewards for appliances, renovations, and other amenities means you can create a personalized living space for your family.

Uber incentivizes the cross-sell. Uber has unveiled a rewards program that links usage of their blockbuster UberX service to discounts in their growing UberEats and other delivery ecosystems. Leveraging their existing brand equity, they are developing new services that connect them to larger audiences and tie their customer base more closely to them.

Consulting giants continue to blur lines. In 2017, four of the world’s biggest consulting firms also appeared on AdAge’s list of the world’s biggest advertising companies. Through acquisitions, IBM, Accenture, PwC, and Deloitte have each grown their marketing offerings to $2.5B+ businesses. Consulting firms can leverage existing relationships with executives to offer comprehensive management, financial, and marketing services. 

 

TAKEAWAYS
Care for your culture. Individuals buy, and brands can build loyalty by focusing on the employees who sell. Often they are customer-facing: floor staff, BD leads, CX reps, lawyers, consultants, flight attendants. But just as often they are behind the scenes: designers, managers, content creators, admins, leadership. All of these people are ambassadors for your brand, in their lives and in your office. Brands that mirror their internal and external values have a shorter line to connecting authentically with the emotional, social, and cultural interests of their customers. 

Connect your customers. Connecting to customers authentically builds a strong relationship between individual and brand. To strengthen that relationship, find ways to connect customers to each other. Creating community can range from a curated hashtag library to an annual conference, but finding ways to connect fans can serve as third-party validation, and enable product or service discovery and cross-selling opportunities.

Join with like minds. No brand is (or should be) all things to all people. In a shifting landscape, brands are responding to technology, regulation, and opportunity in myriad ways. This means brands offering complementary services are in a position to join forces. Sometimes this means an acquisition or a merger, but often a partnership is just as beneficial. Partnering with brands that both match your values and the needs of your customers can offer your audience both practical and emotional reasons to stay loyal to your brand.

Differentiate with design. Consumer products may be reaching peak design. Startups are disrupting industries left and right with lean business models, seamless experiences, and slick design. In this space, good design is becoming table stakes. Professional services industries have not caught up, though the tides are turning. For many of these firms, design offers a remarkable opportunity to connect quickly and directly with customers to establish and sustain long-term relationships.