Editor’s note: Shawn Paustian is the associate director, thought leadership at Numerator. This is an edited version of an article that originally appeared under the title “Brand Loyalty 101: How to Measure It & Why It’s Important.”
A brand marketer needs to not only build a customer base, but a loyal customer base. Strong brand loyalty is an important marker of success for many consumer brands, but loyalty is difficult to define and measure. In our white paper, Modern Measures for Driving Loyalty and Efficient Marketing, we investigated what loyalty means, how it can be uniquely measured and why it's important.
Brand loyalty is the desire and sentiment a consumer has towards purchasing a brand repeatedly. For example, a consumer purchases Monster Energy drinks every week, choosing to do so over other energy drink brands. There are many other energy drink options including Celsius and Red Bull, but the consumer’s reasoning for choosing Monster Energy consistently is because they enjoy the product and they relate to the brand’s marketing and messaging.
Brand loyalty is not limited to purchasing the same product repeatedly. For example, brand loyalty can extend to other products from the same brand. Unilever’s Dove brand is an example of this as it operates across a variety of categories such as personal wash, deodorant and hair care. Consumers who choose Dove products in all these categories are considered loyal given their desire to purchase the brand.
An additional type of loyalty is customer loyalty. But what is the difference between brand and customer loyalty? While brand loyalty is built on how a consumer perceives a brand and the experience it provides, customer loyalty is based on absolute pricing (i.e., a consumer purchases one brand instead of another brand given it is the cheaper option or they have a coupon). Whereas brand loyalty is a longer-term tactic focused on perception, cust...