In the brand game, there are four levels of brand loyalty, including one to avoid
Imagine you have created a range of new products with a totally new brand name. It’s time to begin building that brand. As with video gaming, there are several levels of brand success, and there’s one level that will drag you down.
All brands start at the same place — completely unknown. Marketing and brand development at that point is focused on Level One: Brand Awareness. Before customers can make a choice that includes your product, they have to know it exists, and they will want to know a least a little about the brand. Where is it from? What does it stand for? Why is it better than what I buy now? What is interesting about it? Every brand will initially have positive and negative perceptions in the minds of their prospects, and, at Level One, the negative perceptions are usually still winning. Chief among them is the question, “Can I trust this brand?” Brand Awareness is critical to beginning the journey and generating trial of your product or service. But it isn’t enough.
Level Two: Brand Preference. Virtually every brand depends on repeat business, particularly when the cost of customer acquisition is more than the profit generated by a first sale. Establishing your brand as a preferred choice is where you can really begin to get traction for your business. A second sale costs less to generate and a third can be even cheaper. Having created a repeat customer, word-of-mouth begins to grow and attract other customers to the brand. At this point, the positive perceptions of your brand have started to outweigh the negatives. You are well on your way to the highest level.
Level Three: Brand Loyalty. This is as close to brand nirvana as a brand can get. Your customers generally see only the positives of your brand. Price is a minimal factor, even if it’s at a premium level. Your customers value your brand. They look forward to new products, and may even line up to buy them. A customer who thinks of your products as “my brand” is usually your most profitable buyer and, often, an ambassador. The lifetime value of customers like these can be mind-blowing and, in fact, are a substantial part of your brand’s market value or equity. Many of these customers reach the ultimate in brand affinity, which I call sub-conscious loyalty, meaning the customer does not even consciously think about choosing your brand. They just get more. (Honestly, when was the last time you thought about buying a different brand of toothpaste?)
There is one more level to keep in mind, Level X: Brand Purgatory. Woe be to the brand that regularly puts itself on their customers’ black list. Cross enough loyal customers, and a brand can end up in purgatory (See: Chipotle). Betray or anger more of them, and the brand will struggle to survive (See: Chi-Chi’s). And, keep in mind the problem may not be with the product or service itself. People get mad at brands for lots of reasons, including perceived political support or positions on social issues. This type of anti-loyalty can be difficult or impossible to overcome.
Of course, an established brand is likely to have prospects and customers that inhabit all four levels of brand loyalty. But the best brands keep them moving toward nirvana and away from purgatory.
