Client loyalty may be examined on two different levels – behavioral and emotional. For the former, we analyze the actual behavior of the client and the indication of their loyalty is, for example, using a broad range of our products and services, recommending us to their friends or renewing the contact with us to place another order. On the other hand, on the emotional level, we can measure a client’s loyalty to our brand and ttheir committment to continue placing orders even when we offer the products at prices higher than the competition. Loyalty is when the client is not motivated by habit (“I have been with this supplier for 10 years”), but by conscious actions resulting from a positive emotional relationship binding you and the client.
Building client engagement and attachment - measured by monitoring new client behavior - can help you increase your chances of achieving a set goal. David Aaker, an American professor of management, distinguishes 5 levels of brand loyalty:
- A disloyal client – one who is not attached to any particular brand, a “bargain hunter”, whose choices are only motivated by price and availability. An example of a disloyal client is someone who is a fan of online shopping and searching for deals. Building a long-term relationship with a client like this requires establishing a realtionship that is based on non-monetary benefits and proving that the lowest price does not necessarily guarantee high quality.
- Habitual client– one who makes routine transactions, each motivated by the same factor. The quality of the products and services are “good enough” to keep working with the same supplier. You can win this client’s loyalty by helping them realize their motivation and by presenting them with additional benefits.
- Client satisfied with their current situation due to the high cost of changing suppliers– those costs can be monetary or they can manifest themselves as the risk associated with the possible drawbacks of the new product or the service. When dealing with this type of client, a financial incentive strategy is quite successful. You need to make clear that the benefits meet and exceed the client's needs, as compared to those offered by the previous supplier.
- Client who treats the company as a friend – one who likes the company but is unable to pin down why. It can be high quality, good service or positive reviews from other customers. This relationship can be transformed into a long-term one, but the presence of emotional factors means you'll have to be creative in winning the client's loyalty.
- Fanboy – customer who identifies themselves with the brand. In order to convince this client to buy products or services from you, get to the bottom of their strong affiliation with the brand. Knowing their motivations, you can attempt to draw their interest to areas of the company that they didn't care about before. Remember not to deprecate the client’s choices, as their emotional attachment might lead them to withdraw if you start pointing out the drawbacks of the products or services they chose. This is related to a cognitive dissonance, a type of mental discomfort which everyone tries to avoid. In that situation, the client will defend the choices they made to maintain good self-esteem, following the rule – “the more time, effort and money I put into a decision, the more I will stand by it”. If you manage to win over a client in this way, you'll gain a true fan who will influence other potential customers and recommend your company.
While building sales relationships with your clients, you can pinpoint what kind of client they are, even during the research and needs analysis stage. By asking them a series of questions about their relationships with previous suppliers, you can place them on the 5 level scale, which will later facilitate choosing the sales tool needed to achieve your set goals. You will need to negotiate differently with a disloyal client, who does not have any emotional ties to the previous suppliers, than with a fanboy, who will require a different set of arguments to be convinced.
Different generations, different approaches to loyalty
According the 2016 Connected Consumer Goods Report, a Salesforce study researching consumer behavior in the United States, regardless of how consumers look for products or what factors are most important for them, there is one factor which cannot be omitted: generation. Each age group has their own approach to shopping and expressing brand loyalty. There are currently 3 generations of consumers:
- Millennials, Generation Y –18-34 years old,
- The Generation X –35-54 years old,
- Baby Boomers – over 55 years old
According to the report, all age groups use the internet to verify prices and look for product reviews. Before ordering a product, the majority of clients, regardless of their age, will look for more information online (69%). It comes as no surprise that the youngest consumers - those aged 18-34 - are most likely to use social media to look for products (25%), as compared to Baby Boomers (5%). However, all age groups agree that the best service can be found in traditional stores, which are the primary purchase destinations for 51% of millennials, 52% of Generation Xers, and 57% of Baby Boomers. This demonstrates how vital direct contact can be when building a long-term relationship between the customer and the salesperson, who can convince the customer to buy something regardless of the difference in price. The differences between the generations become clearer when you analyze both the purchase process itself and the expression of brand loyalty. The youngest generation engages in public criticism more often than others (33%), but participates in loyalty programs at a higher rate (44%).