The concept of brand loyalty, as defined by the Oxford Dictionary of Marketing, means the unwillingness of a consumer to switch to a competing product or service.

It is an underpinning aspect of successful business, as this is what creates repeated purchases. To put it simply, it’s what allows you to make sure that the customer that you spent effort and time on convincing to try your product out remains a client over a long period of time.

Undoubtedly, the quality of the service that a given company provides plays an important role in the success of a customer’s brand loyalty to that specific company. But this is not where it ends. It should be the aim of any business — no matter if you are small, medium, or large scale — to retain the customers that enter through your virtual or physical doors. One way to improve this concept is by implementing a system that incentivizes the customer to continue making purchases from you. You need to make sure that once the customer enters the ecosystem, it becomes harder for them to switch to an alternative, even if it may be marginally better than your product, than to simply continue purchasing from you.

This idea of building ecosystems has been utilized by all of the big name companies that you know about. This idea is much simpler to realize when your company has a certain technology at its core, which creates an almost physical walled garden around a consumer. However, what can you do if your business is easy to switch in and out of by a consumer? The answer lies in loyalty solutions. Whilst pretty much every online or physical business has some sort of an offer for new customers to purchase their first product, this attention to the customer drops off rapidly after that first purchase is made, which ends up costing companies greatly. As a Harvard Business School showed, even an increase of 5% in retention can increase profitability of a company by 95%. I’m no mathematician, but a 95% increase sure does sound like a lot!

Loyalty solutions are then a means by which a customer can continuously feel incentivized to make purchases at a particular company, as they know that making purchases with this company is better from a monetary and opportunity cost standpoint, than going on the search to test out competitors. To increase retention, your business needs to have the right balance of a quality product that is liked by your consumer as well as the mechanisms in place, in the form of loyalty programs, to keep your customers coming back for more. Then you will be on the path to success and prosperity.

If you’d like to find out more about Bubblehouse’s innovative loyalty program centered around customizable loyalty through digital assets, get in touch with us today for a quick 15-minute call.

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