Customer loyalty is something many businesses aim for, but it’s not always a straightforward path.
Understanding why customers stick around can be tricky, especially when factors like subconscious influences come into play. This creates challenges for business leaders wishing to boost customer loyalty.
In Intuit Mailchimp’s recent “The Science of Loyalty” report, consumer behaviour scientists Dr. Cyrus McCandless and Richard Shotton explain the psychological drivers behind loyalty, highlighting the risk of relying solely on what customers say about their motivations and wants. By understanding the true drivers of loyal behaviour, marketing teams can craft strategies rooted in science to create meaningful connections and enhance customer commitment to their brand.
Here are five key aspects of customer loyalty that every business leader should keep in mind:
Loyalty is less calculated — yet more complex — than you think
It’s easy to romanticise loyalty as an intentional devotion to something or someone. But in reality, it is far more nuanced. Often, consumers stick to what they know out of habit or convenience, rather than an active affinity for a particular brand. Many will even repurchase almost automatically, driven by product availability at the time of purchase.
Given that factors like familiarity, convenience and routine can influence repeat purchases, businesses should focus on strategies that increase brand recognition and streamline purchasing by building recurrent purchases into the customer’s routine.
Cognitive biases are more compelling than rational factors
With the wide variety of brands and products available today, making a decision can feel overwhelming. For example, consider the number of options available to consumers in the drinks category: soft-drinks, juices, flavoured waters, energy drinks, and so on. When was the last time you stood in an aisle and considered every single item on the shelf?
This example illustrates the significant role of cognitive biases in customer loyalty. To avoid decision fatigue, consumers rely on ‘mental shortcuts’ for quick and efficient choices. In the case of evaluating all of the beverages in a drink aisle, a shopper may quickly select the drink they’ve enjoyed most recently or a tried-and-true favourite. Businesses can simplify decision-making by surfacing relevant products to customers who ultimately want to make easier choices. All this can have a real impact in driving repeat purchases.
There are four neurobiological motivators of consumer behaviour
Consumer behaviour can be boiled down to four neurobiological principles: reward, memory, social interaction, and emotion. While The Science of Loyalty report covers these principles in depth, here’s a basic overview of what drives consumers.
- Reward: Feelings of reciprocity, pleasure and recognition fuel the release of dopamine—laying the foundation for habit formation— which is crucial for fostering consumer loyalty.
- Memory: Past experiences and familiarity can shape how consumers perceive a brand, influencing their future behaviours and attitudes.
- Social Interaction: Consumers are wired to conform and make decisions based on social cues, fostering a sense of belonging.
- Emotion: It’s often said that people won’t remember exactly what you said, but they’ll remember how you made them feel. Similarly, emotional experiences with a brand enhance both memory and social interactions, inspiring loyalty-driven purchases.
There are tactics that play into neurobiological motivations
To enhance loyalty based on those neurobiological principles, business leaders can employ specific tactics to effectively engage customers and cultivate lasting relationships. Here are some suggestions:
- Reward: Offer meaningful benefits and make shopping fun to create a sense of reciprocity.
- Memory: Create an easy, familiar, and consistent shopping experience to make this process memorable. If you can even save them some precious time, guess who’s brand they’ll think of next time they shop?
- Social Interaction: Encourage peer-to-peer gifting, establish review mechanisms for social proof, and actively seek and respond to customer feedback.
- Emotion: Engaging customers with brand values or social causes can evoke emotions that influence their buying behaviour positively.
There is a spectrum of commitment
Customer buying decisions are shaped by their level of commitment to a brand, ranging from passive to enthusiastic. While a fandom customer base might seem like the gold standard of customer loyalty, it’s not always necessary for generating revenue.
Intuit Mailchimp’s “The Science of Loyalty” report found that while some customers feel emotionally connected to a brand, others may stick around out of habit. So, targeting habitual buyers can be a simpler yet profitable strategy. A well-rounded loyalty plan should cater to all different levels of commitment.
In an age of increased competition and price-conscious consumers, loyalty is crucial. By understanding what fuels loyal behaviour, businesses can drive repeat purchases and build brand loyalty that lasts for many years to come.
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