The 6 Stages of Brand Loyalty - Turning Visitors Into Fans
by Dimitris Tsapis
December 1, 2020
The process of building a loyal customer base has never been easier and more complex at the same time. While building a business and setting up your digital marketing is simple enough, knowing how to differentiate your brand can be challenging.
So how do your build a customer base that buys all of your products and promotes them too? This is the million dollar question for most companies. While the majority spends a large part of their annual budget on customer acquisition strategies, only a handful understand which of their efforts touch upon the different stages of brand loyalty. These are the companies that understand how futile traditional marketing can be, and how little of their efforts actually capture money-making attention.
After decoding the concept of customer loyalty, modern marketers have managed to identify several stages which a customer has to "pass" through before becoming a true fan.
The 6 stages of brand loyalty
Brand loyalty takes a long time to build. Most brands require decades of consistent effort to associate their name with a familiar feeling, a positive reputation, or an expression of their customers. Let’s start from the very beginning, and work our way through every stage.
1st stage: Attraction
In a world full of new ideas and continuous advertisement “bombarding” the brands that manage to stand out follow a simple, three-step formula.
- They are simple to understand
- Easy to share with others
- Promoted in an environment that generates customer engagement
This three-step awareness formula worked really well for Frank Body, a small-sized cosmetics brand that managed to build a following of 800k following on Instagram using a tiny budget. Its team brainstormed on different ways that could lead to increased awareness, and decided to focus on user-generated content marketing. The premise was simple: create an Insta-worthy product packaging, having users take a selfie for Instagram and start new trends. The team financed several influencers to kickstart the “challenge” and the public’s response was massive. Within three years, Frank Body was generating $20 million in annual sales.
Here’s how Frank Body applied the three points:
- They created a brand with one simple product that is easy to understand - ground coffee beans used as an exfoliating mask.
- They tapped into the lifestyle of their audience and found perfect product placement opportunities (simple challenges that generate attention from their peers).
- Finally, the brand took it to Instagram to promote this challenge, the platform where their audience is most often found.
2nd Stage: Conversion
Google and other search engines are great platforms to kickstart your prospecting efforts. However, it is important for your campaigns to be as targeted as possible. This can be done by:
- Understanding your target audience and which channels they mostly use
- Positioning your products and services in a way that matches their search intentions
- Creating a system that is able to qualify potential leads
A great way to understand how this translates into a strategy is by looking at the placement of products in retail stores (in-store product placement). Many retailers use image recognition technology and shelf analytics to understand what type of placement would generate the largest amount of sales.
For many retailers, the data can be quite surprising. However, when adjusting product placement based on these findings, the sales to shelf placement ratio increases, and the brand’s popularity grows as a result.
Another great way to understand how the conversion stage works is by looking at mid-sized e-commerce stores. The CR (Conversion Rate) is one of the most important metrics that determines the success of a brand. However, going from awareness to conversion requires a lot more than just placing a product in your web store. There are several steps that need to be taken before a consumer is qualified as a potential buyer, and then targeted in a more personalized manner. We have previously talked about this process here.
3rd stage - Followup (nurturing first-time customers)
One of the most important stages of brand loyalty is the “follow-up” that occurs after a transaction has taken place. You have now turned a prospect into a customer; they decided to trust your brand and it is now your responsibility to make them understand that they made the best decision. This continuous engagement process is known as “nurturing”, and aims at increasing the lifetime value of a customer through (eventual) repeat purchases.
Here is what you need to remember when it comes to this stage:
- Nurturing campaigns primarily occur through email marketing, but following the same path will not necessarily help you stand out.
- Too much nurturing and you will be seen as “spammy”, too little and the customer will forget about you. You need to find the golden middle, which is only possible through experimentation.
- Nurturing leads to top of mind awareness, but this can be either positive or negative depending on how heavily you promote your products. The more value you provide to first-time customers, the more forgiving they will be towards your promotional efforts (more on this below).
- There is a strong correlation between nurturing strategies and the ability to provide good customer service. To be successful in the one, you will need to be successful in the other as well.
- Nurturing campaigns lead to feedback for your brand and its products (through database marketing and analytical tools). This information can then be used to improve both your products and the way in which you nurture your audience.
4th stage - Rewarding repeat customers
As we progress within the different stages of brand loyalty, it becomes clear that the relationship you want to build depends on your ability to generate positive feelings in your customers. Those feelings are usually established by satisfying their needs and expectations. In short, the more value you provide and the more opportunities you discover to do so, the higher your changes of repeat purchases.
Chet Holmes said it best:
“The one who gives the market the most value and best information will always slaughter the one who just wants to sell products or services”.
So, what are some different ways to provide this type of value? The answer is different depending on the brand and industry:
- Fashion stores may offer a discount to repeat customers through a loyalty program. They may also leverage CRM data to offer a more personalized service.
- Banks may offer a dedicated line to an account manager in order to maximize the efficiency of their customer support.
- Airlines may offer priority boarding or free meals on board. They may even offer gifts to those who manage to collect enough air miles.
- E-commerce brands may offer early access to product catalogs or value-packed ebooks.
But value is not the only thing that matters - knowing how to deliver it is equally important. The ability to transfer this value in the best possible way lies in your ability to understand the audience you are serving! A rather seasoned business executive (Baby Boomer) recently told me that customer service is no longer personalized due to inexperienced customer service reps (Gen X). His reason? He had earlier left a voice mail to a clothing rep, asking a question and requesting a call back as soon as the rep was available. The agent responded swiftly, but instead of calling he sent an email. In the eyes of the executive, the customer service agent failed to deliver good service due to the fact that he did not contact him through his requested and preferred communication medium - the phone. Instead, he received an email; a less personalized response according to him.
On the other side, the clothing rep who belongs to a younger generation most likely assumed that the telephone would intrude the customer’s personal time and is rather outdated as a means of communication. He would never assume that his actions would be perceived as they did. The lesson is simple - delivering value depends on your ability to stand in the shoes of your customers.
5th stage - Turn loyal customers into true fans
A true fan is a loyal customer who buys all of your products, year after year. But how do you go from a repeat customer to a true fan? There are several ways to do so. First off, make sure you read Kevin Kelly’s 1000 true fans. The short essay delves into the exact definition of a true fan and how such customers allow creative entertainers to make a living.
Another way is to make your audience aware of your complete product availability through continuous education. Some merchants even reward customers that are willing to go the extra mile. This can often be seen through loyalty programs that follow a hierarchical structure. The more involved you are (through spending and behaviour) the more benefits you “unlock”.
Let’s briefly touch upon behavioural involvement. By incentivising customers to take specific actions (e.g. promotion on several social media channels), you can collect data that will help you improve future strategies. Hence, this stage benefits the retailer twofold:
- You maximize the CLV of your loyal customers
- You identify which channels can lead to faster growth and more sales
6th stage: Stimulate user-generated promotion
The 6th stage turns a loyal customer into a “brand advocate”. Apart from buying all your products, brand advocates engage in word-of-mouth advertisement, offer regular feedback, and help the brand grow by stimulating other to create user-generated content. But how do you manage to reach this loyalty stage?
Cosmetics brand Deciem has done so through a number of different ways.
- They answer each and every review in a personalized manner while also offering valuable feedback to customer questions. It is clear that support agents use the products as well, and are well versed with them.
- They have an active Facebook community with thousands of members, each helping each other out. Members are very active and engaged, as the product availability is so versatile.
- Their Instagram presence is top-notch as well, having nailed both personal branding from the founders and corporate branding for the product itself.
- Their brand packaging speaks to the audience in a way no competitor does (e.g. Ordinary products), which leads to even more user-generated content on platforms like Instagram and Facebook.
- They create videos that generate high levels of engagement while educating their audience.
Customer loyalty is not an exact science but there is a lot of emphasis on data. While there are many things you can do to attract, convert and retain your customers, there is a general blueprint of the steps you need to touch upon while going through this process. To summarize, here are the stages of brand loyalty:
- Attraction - focused on generating awareness and leads
- Conversion - Turning leads into customers
- Followup - Engaging with new customers
- Reward repeat customers - Show your appreciation by offering more value
- Turn loyal customers into true fans - Reaching the peak of CLV
- Stimulate user-generated promotion - Turn fans into brand advocates