September 17, 2021

The Effects of Customer Experience on Brand Loyalty

When businesses deliver exceptional experiences, it’s a win-win for the consumer, the company, and the industry as a whole. It minimizes friction, maximizes engagement, and leaves people feeling heard and appreciated.

Give customers a positive experience, and they’ll also be more likely to spread the word to their friends, family, and social media followers. In this article, we’ll examine the link between customer experience and brand loyalty.

Impact of Customer Experience on Brand Loyalty

Today’s consumers are always seeking the next best thing, even if they are happy with their current product or service of choice. Delivering a powerful customer experience is paramount in keeping an audience’s attention and can give them the confidence they need to avert their eyes and stick with your company.

The best customer experience creates emotional connections, builds trust, anticipates needs, and improves retention—all of which play a critical role in driving brand loyalty.

A 3Pillar Global expert, Saimul Hasnain, notes, “It costs far more to attract a new customer than retain a current one. The key to sustainable growth is investing in turning customers into true fans, meaning that you need to develop a deep understanding of why customers feel a certain way and what they need when specific feelings arise.”

It’s worth noting that these changes should be monitored on an ongoing basis as consumer behaviors and attitudes are constantly evolving. What customers like today, they may not necessarily like tomorrow.

3Pillar Global’s Charles Zujkowski says that it works both ways. According to him, “Poor customer experience erodes brand loyalty, which has become a lot more volatile as customer expectations in all industries have been rising due to digital transformation.”

In other words, their needs are constantly changing and brands need to work harder to meet expectations and keep people coming back for more. Having the right data—ideally behavioral data from users—can help ensure we are current in the way we solve their problems.

What the Numbers Say

The findings from a recent KPMG survey demonstrate the impact of customer experience on brand loyalty, revealing that 74% of consumers claimed product quality inspired loyalty, 66% value for money, 65% product consistency (size, taste, quality, etc.), 56% customer service, 55% shopping experience (shopping, checkout, returns, etc.), 55% selection/product assortment, and 54% pricing.

While these factors were vital in earning and keeping the respondents’ loyalty to a brand, there’s also the challenge of unearthing the hidden factors that drive loyalty.

Companies are dealing with more data than they can handle, making it harder than ever to extract the insights they need to identify what drives loyalty and why.

However, there is light at the end of the tunnel as one report points out that tackling unstructured or unusable data with the right tools can help organizations identify emerging issues before they become more prevalent.

How to Build Brand Loyalty by Improving Customer Experience

A lot is riding on existing customer relationships that you can’t afford to lose. Research shows that acquiring a new customer (Cost Per Acquisition) can cost 5x more than retaining an existing one. But the reality is that neither group can be ignored. For a business to grow successfully, they need to strike a delicate balance between new and existing customers.

Whenever a customer has a positive experience with a brand, they begin to trust them more. This trust builds over time, culminating in more interactions and more purchases. And with the right strategies in place, your company has the opportunity to upsell current customers and also turn them into evangelists for your business.

Here are three tactics to consider for creating the types of superior customer experiences that can lead to brand loyalty:

Focus on Relationships

Brand loyalty begins when a business has forged a genuine relationship with its customers.

Marketers who factor in their audience’s wants, needs, and emotions in their decision-making will also be in a better position to retain those customers for the long haul. In fact, more than 70% of consumers say that they will only buy brands that are aligned with their values. Millennials and Gen Z tend to prefer brands that support causes they care about. Companies like Warby Parker, for example, have taken note of this. As one of the only carbon-neutral eyewear brands in the world, Warby Parker has distributed more than eight million pairs of glasses through their Buy a Pair, Give a Pair program.

Offering empathetic, proactive customer service is a surefire way to stay on your customers’ good side. You’ll also want to show them you’re invested in their success by staying connected between purchases—engaging on social channels, running events, creating a customer loyalty program, sharing content recommendations, etc. Essentially, you want to prove to your customers that you’re not just in it for the transaction—it’s a symbiotic relationship.

Aim for a Seamless Experience Across all Channels

A seamless customer experience means that whether a customer is online or offline, they see the same branding, structure, values, and tone reflected across every channel. Seamless customer experience is also known as omnichannel customer experience.

With that in mind, think about what you can do to make things easier on your customers.

  • Is the experience consistent across each touchpoint?
  • Are there any areas of friction your customers are facing during the checkout process?
  • Is it easy for them to get in touch with your customer service team?
  • What platform do your customers spend most of their time on?

3Pillar Global’s Angel Almada explains how Apple’s unique approach to brand loyalty and customer experience has contributed to its success. “Look at Apple—it features a well-designed customer experience that is analyzed from every possible angle and friction point. It generates an expectation on new offerings, and it could even position flagship products as solutions to problems the industry didn’t know they had,” he adds.

In addition to addressing customer pain points, improving the omnichannel customer experience and interaction experience are also critical to building lasting customer loyalty, per Gartner. These areas encompass how a product is used, how it benefits the user, and how convenient it is.

Prioritize Personalization

With the right customer data, you can continue improving your customer experience and brand loyalty by personalizing every message.

Whenever a company incorporates personal elements to their email marketing alone—addressing your customer by their first name is the bare minimum—their emails end up with 27% higher click-through rates and 6x higher transactional rates.

It’s no wonder why 73% of customers feel some level of 1:1 recognition from their favorite brands. In order to have a shot at being included in that list of favorites, you need to aim for true 1:1 personalization.

This strategy works because it’s an effective method of showing customers they’re not just another face in the crowd but rather individuals who play a major role in the success of your business. As a result, they’ll return and continue to support your brand.

If you imagine going into a store and you have such a great sales experience, you come back to that store and look for that same salesperson because you felt taken care of. If a brand is personalizing the experience for you and treating you like you are in their store, the experience is better.

Final Thoughts

While earning repeat customers can often feel like an uphill battle, putting your customers first will help you win over your target audience and also keep them as long-term and loyal buyers.

As 3Pillar Global’s Mihnea Jeleriu points out, “If a customer has a specific experience with a company or product, it shapes the expectations they have for future interactions. If it goes well, the customer is confident the brand can meet their needs the next time around and increases their chances of returning. Whereas, if something goes wrong, they might take their chances on a competitor.”

Regardless of industry or niche, companies with a laser focus on customer experience and brand loyalty will put themselves ahead of the competition.

Providing software product outsourcing solutions to companies around the world, 3Pillar Global’s customer-first mindset helps clients turn customer experience investments into valuable revenue streams. Learn more about how we can help.

Special thanks to these members of FORCE, 3Pillar’s expert network, for their contributions to this article.

FORCE is 3Pillar Global’s Thought Leadership Team comprised of technologists and industry experts offering their knowledge on important trends and topics in digital product development.