They say brand loyalty is dead. They say Millennials are to blame. Or maybe constant connection is exposing people to more choices than ever before. What we do know for sure is that brand loyalty still matters.
And it’s anything but dead. Indeed, it’s actually thriving with rich opportunity for brands.
Facebook IQ surveyed 14,700 adults in the US, taking a look at the state of loyalty today in five verticals: Auto Insurance, Airlines, Hotels, Grocery and Restaurants.
We found that 77% of people surveyed are returning to the same brands again and again. 37% indicate they make repeat purchases and are loyal to a company (“Brand Loyalists”*), and 40% say they make repeat purchases but are not loyal to a company (“Repeat Purchasers”*).
Read on for our five most interesting discoveries, including what drives loyalty for Millennials, whether price or experience matter more and what frequent usage of Facebook and Instagram has to do with any of this.
1. Loyalty is thriving and rooted in emotion.
While 77% of people surveyed repeatedly buy from the same brands, Repeat Purchasers and Brand Loyalists often have very different drivers. When asked to choose the top reasons they continuously purchase from the same brand, Repeat Purchasers within a vertical tend to point to more utilitarian qualities related to price and convenience. Meanwhile, Brand Loyalists within a vertical tend to prioritize more emotive and experiential qualities, like trust and service (though utilitarian qualities were still important, suggesting that base-line functional needs still need to be met). This indicates that to achieve loyalty, brand relationships should be up-leveled to a more emotional and experiential standing.
2. Millennials face unique barriers to loyalty.
Millennials (ages 18–34) may be known to experiment, but to dismiss them as promiscuous shoppers would be a mistake. In some verticals, they are actually as likely as Boomers (ages 55+) to be Brand Loyalists. Not surprisingly though, Millennials are less loyal in verticals where experience and price play a bigger factor, like Airlines and Hotels. Millennials also want to be loyal to brands: they’re 1.75x more likely than Boomers to say they’d like to be brand-loyal, but they still face challenges. We found, however, that many of the challenges Millennials face are unique among them.
3. Price matters, but experience matters more.
Likelihood to be loyal increases as household income increases: people surveyed who report a household income of $150,000 or more are 32% more likely to be loyal than those who report a household income of under $35,000. But then we asked people, regardless of household income, to describe the brands they love most. We divided these words into the following verticals: consistency, cost, quality and experience. By far the largest group of words was under experience. Perhaps people will always be willing to pay for the things that are memorable … whether that’s because of the taste they can’t get elsewhere or the family fun they’ll remember forever.
4. Children change everything, even their parents’ relationship to brands.
We’ve learned that parents navigate a landscape of infinite choices and voices by staying informed through use of mobile, Facebook and Instagram. So it’s not surprising that as New Parents* develop carefully considered brand choices, they are more likely to be loyal to the brands they ultimately decide on. In fact, 42% of New Parents describe themselves as loyal compared to 36% of non-parents.*
New Parents are particularly more loyal in verticals that might not trigger as much loyalty in non-parents, such as Hotels. This is especially true of verticals with products and services that tend to be more experiential. We think it’s because a desire to experiment gets replaced with a desire to stick to what they know. After all, a restaurant’s food might not seem as important when parents start thinking about stroller access and crayons at the table.
5. Frequent users of Facebook and Instagram are more likely to be loyal.
Loyalty to Facebook and Instagram suggests loyalty and repeat purchasing of brands. People who use Facebook more than five times a day are 1.25x more likely to be Brand Loyalists than people who use Facebook at least once a month. And the same holds true for Instagram: those who use Instagram more than five times a day are 1.26x more likely to be Brand Loyalists than those who use Instagram at least once a month. This could be because frequent platform usage of the platform is related to the type of loyalty behaviors that translate to relationships with other categories and companies.
What it means for marketers
Highlight service to build trust
To secure Repeat Purchasers, brands must meet basic functional needs like price and convenience. But to convert Repeat Purchasers to Brand Loyalists, brands must over-deliver on customer relationships. One way in is personalized service through 1:1 communication. Companies are increasingly using messaging tools to better meet the needs of their audiences.
Hone in on the experience … and the after-experience
Creating a meaningful, memorable and noteworthy experience is critical to cementing a brand’s relationship with people. Also consider ideas that celebrate the good times had between you and customers. Some online providers and platforms, for example, do this through celebrating anniversaries.
Connect through personalized communication
Some of your audience may have unique needs that need to be met before they’ll even consider loyalty to a brand. For example, New Parents may be experiencing a newfound receptivity to airline and hotel loyalty as they start needing things like cribs and highchairs. In addition to considering how to evolve your product, tailor your communication by target segment to welcome new and old audiences alike.