Loyalty

Yesterday, one of our favorite Twitter accounts, @heyitsalexp, dropped this: 

For our money, Alex could have stopped after the first sentence (though we don’t object to the rest of it), because loyalty is one of those terms that seems specific on its face, but is used to such a degree that it lacks much in the way of substance.

(If you’re skeptical of this, let’s try something this week: Reply with your definition of loyalty—or your reaction to the remainder of this piece—and we’ll share the collective results. We’re willing to bet there’s a significant variance here.)

When we hear “loyalty,” we often hear about it in vein of Apple, say, or even Peloton. But what does that mean? And is it actually practical for a CPG brand to aim for loyalty in the same way Apple does?

If you were to attempt an answer at those questions, you might start with further defining loyalty into at least two types:

  • Attitudinal. Loyalty driven by a customer’s brand preference. Usually rooted in emotion. 

  • Behavioral. Loyalty driven by a customer’s actions. Rooted in repetitive behaviors (i.e., repeat purchases). 

Here’s the thing about loyalty, at least when it’s discussed in relation to the Apples of the world: No one raises the question of whether you need attitudinal loyalty to run your business.

For the sake of carrying this example all the way through, consider Apple’s core competitors: Facebook, Google, Microsoft.

When you think about emotional ties to brands or brand advocates, do any of those rank anywhere close to Apple?

Facebook is losing a huge PR war to Apple. No one thinks about Google—they just use it. (Example: Android is the largest operating system in the world, but no one cites rabid fans as a reason for that.) Microsoft … OK, maybe if you’re in finance or accounting you really love Excel. But outside of that? 

If we’re being honest with ourselves, then, the answer is no. These companies are built on behavioral loyalties—the very types that are glossed over when we discuss loyalty in general.

And yet that could be a mistake. Yes, Apple’s market cap is the largest: $2.2 trillion. But Microsoft’s is $1.9T. Google (i.e., Alphabet): $1.6T. Facebook: $920+B.

The point of this? You can create a great business by chasing emotional connections with your customers, but you can also create them without. And there is no right or wrong way.

Perhaps, though, the most instructive case for CPG brands is Coca-Cola, which grew first through ubiquity (“within an arm’s reach of desire). Then, after earning behavioral loyalty, reinforced the brand through emotional advertising.

As a case, then, Coca-Cola shows what perhaps be should be required before prioritizing which type of loyalty you aim to reinforce. And that is this: Understanding which type of loyalty is most valuable to your brand.