For consumer brands, Customer Loyalty increases market share by bringing new customers through word-of-mouth publicity and drives repeat purchases by existing customers. This helps brands organically scale and drive higher revenue and LTV. Four essential pillars of customer loyalty are a great product, a deep relationship, transparency, and security. While building customer loyalty requires an investment of time and money, more and more brands are leveraging technology to erect these four pillars of customer loyalty quickly and cost-effectively. Early adopters of technology experience exponential returns on their investments, and laggards face the risk of being obliterated.
The Four PILLARS of Customer Loyalty
When it comes to customer loyalty, this quote by Elbert Hubbard summarises it well:
“An ounce of loyalty is worth a pound of cleverness.”
The reality of your brand is how customers perceive you. And if your customers become loyal to your brand due to the trust it inspires, they don’t just come back to buy from you again or simply recommend you to others; they insist that their friends do business with you. Loyal customers also spend 67% more than new customers . Bottom line: Customer loyalty can directly impact your company’s success, as retaining customers is not just less expensive; it also results in more sales.
But customer loyalty is not ONE thing. Customer loyalty is a result of building many different “pillars” that lay the foundation of your brand. While you need to get many things right, the most crucial is a great product, a deep relationship, transparency about all aspects of the development, and confidence throughout the buying and consumption process.
- Make a Great Product – The first step to gaining customer loyalty is creating a great product. This comes from years of market research and deep insights into customer needs. Deep insights lead to empathy, which helps you create products that solve the requirement and are easy to use and enjoyable for your customers. This is the first and the most crucial step in building a loyal customer base.
- Develop a Deep Relationship – Without a doubt, the essential elements of any good relationship are making a connection by displaying your empathy for customer needs, being reachable to customers throughout their buying and consumption journey, and being open to and acting on customer feedback. Listening to customer feedback also feeds into the loop of developing great products as per evolving customer needs and aspirations. 75% of consumers expect brands to contribute more to their well-being and quality of life.
- Be Transparent – Customers today demand transparency that goes beyond your website, annual reports, or product labels. Brands are expected to provide information about sustainable supply chain practices and how they give back to the community they operate in. Brands which are meaningful and viewed as making the world a better place outperform the stock market by 134%. 
- Confidence in buying Genuine Products – A secure environment builds confidence. The most critical aspect of security is the guarantee of the product’s authenticity and assurance of its quality. It’s getting increasingly difficult for consumers to tell the difference between an original product and its counterfeit. 70% of consumers who bought a fake product did so without knowing the item was affected at the time of purchase—. Most consumers are also unaware of mechanisms they can use to contact the brand and report spurious products. While it is easy to look the other way, the responsibility for ensuring that customers get authentic products and have a means of validating them lies on the brand, even more so now that tech-enabled solutions have made it reasonably easy to provide such tools in the hand of consumers. Customers have multiple touch points during your product’s entire buying and consumption journey and leave much digital footprint over multiple systems you own and control. While 87% of Americans are willing to have various details of their activity tracked in exchange for more personalised rewards and brand experiences , there is a lot of concern around data being misused and privacy being breached. 56% of US consumers are NOT confident that brands have their best interests when they use, share, or store their personal data. 
Current (ineffective) approaches to building Customer Loyalty
More often than not, business leaders understand their customers well and know how to make great products. They also know how to touch a nerve in their communication and advertising to get customers to try their products. However, brands face challenges in developing deep relationships by listening and responding to feedback, bringing more transparency about their practices, and taking measures to make their customers feel more secure. This is easier for B2B companies since they have limited customers and high margins, budgets and tools at their disposal to cater to these needs. Consumer brands have hundreds of thousands or millions of customers, and building internal capability to do this cost-effectively at scale becomes a challenge.
To build deep relationships, brands are experimenting with new technologies like chatbots on popular messaging platforms, social media, etc., to provide a channel for their consumers to voice out their feelings and provide feedback, but the journey is often broken. Multiple channels are confusing to customers and brands alike. While standards like GS1 set out guidelines to provide more transparency about products and practices to consumers, it is often limited to the information printed on the labels (usually mandated by law). Product authentication mechanisms are typically absent or easily copied by adept counterfeiters. Redressal mechanisms for counterfeit products are limited to writing an email to a dedicated address without much visibility into concrete actions.
Leveraging Technology to build Customer Loyalty
This is where tech companies like O4S come in and help brands effectively solve these problems. O4S provides a SaaS platform that can help brands connect directly with their consumers through:
- Smart Packaging to complement a great product
- Direct engagement to develop deep relationships
- Provenance to provide transparency
- Product authentication mechanisms to build confidence
These are some of the measures that make customers feel secure and build trust in the brand. Each product is provided with a randomised Unique ID for every unit in the form of a Programmable Dynamic QR code. This Dynamic QR code is either pasted on the product (and its packaging) or printed during manufacturing. QR codes are programmed (in batches) to contain important information (manufacturing details, sustainable sourcing certificates, sales channels, etc.) to promote traceability at the desired levels. Once in the hands of the customers, these QR codes can be easily scanned using any smartphone camera (or QR code reader applications) and can provide the necessary traceability, along with options to re-order the product through legitimate channels, reach out to the brand for any grievance, and authenticate the product at the time of purchase (or delivery). Printing or applying QR codes is also more cost-effective than some of the other popular product authentication mechanisms available today in the market.
Brands can get up and running with this technology within a matter of few weeks, and see results in months instead of years. Brands can collect feedback “in the moment” of purchase, use it to understand customer needs better and implement it in the product development lifecycle. Brands can provide more visibility into their sustainable practices and show consumers how they positively impact the ecosystem in which they operate, which customers deeply care about. Once the customer can verify that the product is Authentic, coming to them from a legitimate channel, and won’t harm them (or the ones they love) in any way, they feel secure and trust the brand.
All of this contributes to customers becoming loyal proponents of the brand. And if your customers become loyal to your brand due to the trust it inspires, they don’t just come back to buy from you again or simply recommend you to others; they insist that their friends do business with you.
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