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Brand Loyalty: Everything You Need to Know

Last Modified: February 13, 2023

Brand Loyalty: Everything Merchants Need to Know

Consumers today not only value the products and services they pay for — they also want to engage with brands. By creating a trustworthy, value-driven, and approachable relationship with customers, your business can benefit from increased customer retention and a better bottom line.

Brand loyalty isn’t just important for customer retention — it also has significant monetary benefits. The cost of acquiring a new customer outweighs the cost of retaining an existing one. What’s more, developing loyal customers can help you find new leads, and consequently, convert sales since satisfied customers are more likely to recommend a product or service to their peers.

But finding ways to engage consumers online and increase loyalty can be challenging. Potential customers can be lost in seconds as competitors are always just a click away. Affiliate marketing and regular data analysis are vital when it comes to creating a loyal brand.

The Challenge in Creating Brand Loyalty

The ultimate challenge for many brands is to create unique and personalized experiences for their customers. To do this successfully, businesses must seek to gain a better understanding of their demographic. By knowing the motivations and reasoning behind buyer behavior, brands will be better positioned to make decisions.

While a technology-driven marketplace means that competition is high, it also provides businesses with key information about customers. This data can be leveraged to create unique proposals and personalized offers for customers. The information gathered by businesses is integral to the formation of a successful retention strategy. The types of data businesses can collect include:

  • Personal data: identifiable information like IP addresses, tracking cookies, and device IDs (from a laptop or mobile device)
  • Engagement data: information on how people interact with sources including websites, apps, social media platforms, emails, advertisements, and customer service tools
  • Behavioral data: details about transactions, purchase history, product usage, and qualitative data (e.g. information about mouse movement)
  • Attitude-based data: information about customer satisfaction, desires, and the criteria involved in purchasing

Brands should track data from the very first customer interaction. This will allow them to deliver consistent messages that keep customers engaged. Data analytics solutions can be used to break down this information and surface meaningful insights about what aspects of a brand’s marketing activities need to be improved to increase loyalty.

Loyalty Programs

Loyalty programs are designed specifically to encourage customers to continue purchasing a particular product or service. These programs generally reward customers by offering them free goods, vouchers, or exclusive offers.

While loyalty programs have existed for many years, they will continue to have an impact throughout 2023. Some loyalty programs use an element of gamification to help keep engagement levels high. Zinrelo reported that over 80% of millennials are interested in gaining rewards for purchases and engagement with brands.

A successful loyalty program should be goal-driven. Although a fun game or system can create engagement with your brand, the intent of the program is important. Goals will differ depending on the company, but it is usually beneficial to focus on sales, revenue, repeat purchasing, and referrals.

Once you’ve set your goals, you must establish the performance metrics that measure your campaign’s success. With the right key performance indicators (KPIs), you’ll not only be able to measure how well your system is working, you’ll also be able to identify ways you can adapt and tweak your campaigns for improvement. Some popular loyalty programs include:

  • Point-based system: This is one of the most common types of loyalty programs. It allows customers to earn points as they purchase. These points can then be used to make further purchases or can be redeemed against special offers. The key to a successful point-based system is to utilize a straightforward process.
  • Tiered system: In this type of loyalty program, customers are encouraged to make multiple purchases by moving along the loyalty ladder. It is effective as it involves frequent rewards rather than building toward a more long-term one. Tiered systems offer short and long-term value to customers.
  • Paid system: If a customer can pay a fee to overcome specific purchasing barriers, it can entice them to buy more. For example, an annual membership fee that offers free shipping.
  • Game-based system: With this type of program, customers can earn rewards and discounts by playing a game. A fun and rewarding game can entice customers to continue engaging with your brand. However, there may be some legal proceedings to take care of before launch. (It’s generally more effective to run a simple game that doesn’t have too many requirements.)

Make Affiliate Marketing Smarter

Influencers

Working with influencers can be a fantastic way to build brand loyalty. When an influencer that customers trust promotes your product, those customers become interested in what you have to offer. If you want to attract a younger demographic, influencers are an essential part of building your brand.

Influencer marketing is particularly useful in developing brand loyalty when there is a loyalty program in place. Influencers can promote the loyalty program as well as your products and services. To build your influencer program, start by searching for influencers on Upfluence. Flooret, a company that sells luxury vinyl flooring, found a community of influencers through the Upfluence influencer directory. With fast access to multiple influencers, Flooret was able to find new partners to help grow their brand.

They tracked the progress of their campaign using Refersion’s attribution tracking technology and affiliate management platform. Refersion brings together multiple ecommerce tools, allowing users to manage influencer-based affiliate orders. Users can also customize each campaign, ensuring it aligns with the goals of the business.

While the influencer approach was successful for Flooret, the reason behind the success of their campaign was due to data utilization. The Refersion platform allows businesses to set unique goals and monitor progress. Marketing data reports help indicate the successful and problematic aspects of an affiliate campaign so you can make adjustments to your marketing strategies accordingly.

Using data to inform strategy contextualizes marketing activities, helping brands understand their customers. With increased knowledge, businesses can identify methods of increasing brand loyalty. Establishing the right metrics is an important step in any performance marketing strategy. There are many useful KPIs for analyzing influencer campaigns. However, some of the most important ones include:

  • Number of conversions
  • Referrals
  • Reach
  • Audience growth
  • Engagement

Working with influencers who align with your brand values helps to create more meaningful connections with customers. Engaging with customers on a more personal level increases loyalty and engagement. However, monitoring and measuring how effective your marketing efforts are is essential for continuing growth.

Ambassadors

Ambassadors are long-term partners who promote your brand either in-person or online. Although they may overlap with social media influencers, ambassadors can also play a separate role depending on their local connections and the type of marketing they like to do. As social media growth increases in 2023, ambassadors continue to be a critical component of digital marketing.

Ambassador content that boosts brand loyalty can include product reviews, promotional stories, outreach to peers, and even just wearing or using the products while spreading the word across their social media platforms. They usually receive a unique affiliate link or another method for tracking their success. They may be compensated in free products, commission, or other perks and rewards. The level of formality involved in brand ambassador programs varies. Some are informal and club-like in their setup — with member-only Facebook groups with several hundred or thousand members helping foster a sense of community. Others are more exclusive, with only the most respected influencers invited to join.

Blenders Eyewear found success by re-launching their ambassador program with Refersion and Klaviyo. They generated buzz through word of mouth and saw a 270% increase in affiliate revenue. The brand had humble beginnings in San Diego but grew into a brand that was valued at $90 million. The Blenders Eyewear Street Team program is more selective than before, but it still fosters a strong sense of brand loyalty in its members, who then pass that loyalty on to friends and customers.

While many companies opt for mass marketing campaigns, the true value in affiliate marketing is choosing the right representatives for your brand. By partnering with well-matched affiliates at scale through Refersion, Blenders experienced a 3x increase in affiliate conversions. What’s more, they quadrupled the average revenue earned per email recipient. Performix, a fitness supplement ecommerce business, used Refersion to develop a brand partnership with Alpha Omega Agency to boost their ambassador sign-up program by over 1000%. This enabled them to create a brand ambassador referral program that allowed them to develop a broad community of like-minded fitness individuals committed to their brand’s focus.

The customer acquisition cost (CAC) associated with ambassador marketing programs is usually lower than traditional marketing campaigns. With the sharp rise in online shopping in recent years, clicking on product links in social media posts is an intuitive step for most social media users. When customers repeatedly see the brand promoted by someone they know and like, they may start to develop brand loyalty even before they make their first purchase. Part of the key to ambassador marketing success is keeping a close eye on your demographics. Since your ambassadors are a long-term part of your marketing strategy, you need to make sure each one reaches a demographic that is likely to buy your products.

Refersion is key in managing this data, especially once your team grows larger than a few people. You need to monitor how many people click on a link, sales conversion rates, and the sale size and amount. Refersion can also show you exactly which ambassadors are selling which products, giving you insight into whose marketing is most successful and whether it can be replicated among other ambassadors.

Refersion saw 34% YOY growth from 2019 to 2020 in the clothing and accessories sector, and one of the biggest Refersion success stories was artisanal jewelry business, Pura Vida. Their enormous 590% revenue increase is primarily due to their successful ambassador campaign developed through the brand partnerships forged using Refersion. Thanks to their performance marketing program, the company now manages over 170,000 ambassadors worldwide.

Ambassadors are often asked to be exclusive and avoid promoting competitors’ products, although they are typically allowed to promote products from other industries. If you’re looking for short-term partnerships that aren’t necessarily exclusive, consider influencers who do similar promotional work.

Affiliates

It’s not necessary that affiliates wield large amounts of influence themselves — they may simply be savvy in creating blog posts and other content that links to your products. If this content is trustworthy and useful, it may result in conversions. Because affiliates are not necessarily tied to using their name or image to promote the product, they may take more liberties in promoting it. However, honesty is still key to affiliate marketing 101, as customers have grown warier of online scams and misinformation. Affiliates should be bound by guidelines and a clear set of rules requiring them to disclose their use of affiliate links.

For building brand loyalty with affiliate links, consider reaching out to blogs or other websites that operate within your niche. Besides providing them with free products to review, you can give them early access to news and additional information about your upcoming product line. This can help you stand out in the crowded ecommerce and lifestyle markets in 2023. The Refersion Marketplace makes it easier to find and vet potential affiliates. Tea company Harney & Sons used the marketplace to build a team of affiliates, then used Refersion to track and pay affiliates based on their performance. This system helped them reach new customer bases and expand brand loyalty beyond their usual demographic.

Harney & Sons experienced excellent results with this approach, including a 175% increase in affiliate revenue, a 25% increase in average order value (AOV), and double the amount of affiliate conversions. Aside from the extra revenue, the data they have gathered informs the business on what strategies are most beneficial.

The Bottom Line

Increasing brand loyalty requires fully integrating technology as a major marketing tool. At Refersion, we’ve developed a state-of-the-art performance marketing platform that helps create a more loyal customer base.

Our all-in-one platform not only makes marketing easier — it also makes it smarter. We’ve helped thousands of ecommerce brands, including Pura Vida, Blenders Eyewear, Steve Madden, and Magic Spoon, grow their audiences and increase revenue by cultivating loyal customer bases.

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Written by

Ruthie Carey
Ruthie Carey