Should your brand prioritise customer loyalty or brand loyalty?

Customer retention is an essential part of the success of any business. Retaining customers can be achieved through encouraging loyalty to your business. There are multiple ways of achieving this, but two of the most important methods are through customer loyalty and brand loyalty. Though both are essential for customer retention, there are many differences between the two that must be considered when deciding what your business should prioritise.

What is customer loyalty?

When a customer has a great experience with one of your products or services, they’ll be more likely to buy from or work with your business time and time again. This is customer loyalty and building this kind of loyalty is key to growing a business and increasing profits. It can also lead to word-of-mouth referrals, which can help you attract new customers. It costs more to acquire new customers than to retain older ones, so encouraging customer loyalty can be especially vital for new businesses looking to survive and grow.

What is brand loyalty?

Brand loyalty is when a customer makes an emotionally charged decision to buy from a particular brand time and time again. This happens when the customer believes that this brand will consistently meet their expectations and identifies with the brand on a personal level. This can be a conscious or unconscious decision and is often a result of the brand evoking elicit feelings (such as security) in the customer. A brand with a loyal customer base can often withstand whatever difficulties are in their way, be it a large-scale problem like a recession or a smaller issue such as a change at corporate level- a loyal customer base will continue buying products whatever happens.

Which should you prioritise?

Customer loyalty and brand loyalty are both important aspects of running a business, but sometimes you will need to prioritise one over the other. The main difference between the two is in customer spending vs perception. Customer loyalty has more to do with pricing- if your business has lower prices or better offers than your competitors, then customers will keep coming back. Brand loyalty, on the other hand, has more to do with how your brand is perceived. Customers are more likely to be loyal to a brand if they believe that it offers better services and higher quality products than anywhere else.

Both are important, but which one is prioritised will largely depend on the type and age of the business. If you’re a relatively new business, it may be worth focusing primarily on customer loyalty. Retaining customers will build your reputation over time, at which point you can focus more on brand loyalty. 

When it comes to what to prioritise between customer loyalty vs brand loyalty, there is no universal answer. Different businesses will need to prioritise different things. It is worth working with a loyalty agency to figure out which approach is best for your business. Whichever you prioritise, both loyalty types are important for the long-term success of your brand.

And there you have it – everything you need to know about whether customer loyalty or brand loyalty should be a higher priority for your business.