The ultimate guide to building brand loyalty

Khoros Staff

No matter the industry, every company strives to deliver a quality consumer experience. While customer retention metrics gauge how you’re growing and building customer loyalty, platforms like brand-owned communities enable customers to offer peer-to-peer advice and share feedback candidly. Not all communities and customer experiences are created equal, however. Khoros set out to determine the factors behind customer trust and what brands can do to turn infrequent shoppers into brand advocates.

We surveyed 1,620 adult consumers in the U.S. and the U.K. to better understand sentiment surrounding the state of consumer confidence in brands and the factors that drive customer loyalty. We’ve included some of the top findings below.

Find the full report in our Brand Confidence Guide, which includes brand loyalty examples and strategies to gain customer trust and improve customer engagement metrics.

BFFs (Brand Fans Forever): The ins and outs of customer loyalty

Only 22% of people consider themselves brand loyalists for life. However, nearly six in ten consumers (59%) have particular brand preferences, which means companies have an opportunity to increase that loyalty.

Four out of five customers — a whopping 80% — say a great product will most heavily influence them to develop loyalty to a brand. Dependable discounts follow, with 53% of customers saying that will make them more loyal to a brand. Customer rewards programs (39%) and the opportunity to provide customer feedback or the company taking action on that feedback (27%) are also strong drivers of loyalty.

Customers expect multiple avenues for giving feedback and like seeing their ideas implemented by the brand. This mindset is especially true for Gen Z and millennials. In fact, more than one in three (35%) of these consumers say their brand loyalty will increase when they have those opportunities for feedback.

What this means for your brand

At its foundation, a brand needs a great product or service, but customers want more. Based on our research, the top three actions to take are:

  • Present your products and their benefits in clear and effective ways.

  • Provide customers with information about discount offers and customer loyalty programs.

  • Proactively share your brand’s sustainability efforts as customers research how brands work toward a better environment.

To deliver these critical messages, brands need fast, flexible tools to receive feedback from customers and to proactively engage with customers on their channels of choice regularly. Whether customers offer feedback or engage via social media, call centers, or online communities, customers will remember and reward a brand’s consistent and timely engagement.

The power of online communities

When asked about brand-owned, online communities, our survey respondents had clear expectations of what they expect a brand to provide.

Once they’ve arrived at an online community, customers have specific needs. Based on our research, the top three most valuable experiences a customer expects are:

  • The ability to quickly find answers (31% of respondents).

  • Receiving customer support (24%).

  • Sharing brand experiences and knowledge with other consumers (19%).

What this means for your brand

If there’s not a brand-owned community in place, customers will create them independently — naturally wanting a space to connect and discuss with their peers. Brands that can provide that space get a wealth of content that enhances search rankings and offers powerful insights to internal products, services, sales, support, marketing, and customer success teams.

How can a brand ensure its brand-owned community adds value to its customers’ journey? Keep your content organized and current, and enable plenty of peer-to-peer engagement. Consumers don’t want to search for answers to common issues, only to find incomplete or inaccurate answers. Creating resource hubs like FAQs and knowledge bases can help, as can empowering customers to connect with each other along their buyer and customer journey. The result: Less churn and more passionate fans who help new prospects convert to customers.

It’s not me, it’s you: customer relationships and why customers break up with brands

“I’m moving on” — three words you never want to hear from a customer. And in many cases, a customer won’t be so direct; they’ll simply ghost your brand and move on.

Rising prices are the most common reason customers “break up” with a brand. Nearly two-thirds of respondents (62%) said a price increase has caused them to stop engaging with a brand in the past two years. Poor customer service was also a significant factor, with 42% of respondents saying they left a brand after a bad service experience.

Other elements can sever a brand and customer relationship. A lack of good deals or offers has caused 26% of respondents to break things off, and 21% said a disconnected or frustrating customer experience made them move to another competitor. Meanwhile, 20% noted negative reviews or word of mouth was enough to head for the digital door.

Word-of-mouth reviews are especially critical among full-time students. This group, consisting mainly of Gen Z customers, is more than twice as likely to leave a brand due to negative reviews or word-of-mouth. Gen Z values social proof, whether it’s positive or negative. Praise can quickly turn them into a super fan, while valid criticism may turn them off from your brand forever.

What this means for your brand

There will likely come a time when your organization needs to raise prices. The best way to address pricing changes with your customers is with proactive and transparent communication. Bring your customers along for the development journey, and engage your most passionate advocates early to understand price sensitivity and value drivers.

The sooner you engage customers and explain the "why" behind the price change, the more informed and tailored your approach for rolling out these changes can be. Help them understand the value these changes bring, whether it’s new updates and improvements or additional research and development time to make a product they know and love even better.

When asked about the quickest way a brand will lose their trust, many respondents spoke about unhelpful support and a disconnect with regular customers. They lamented a lack of answers to problems or when things become unavailable without any reasoning behind it.

These are issues a brand-owned community can help address. Creating an open and transparent dialogue with customers may turn fence-sitters into power users. Additionally, fostering and encouraging feedback, reviews, and other word-of-mouth experiences presents your brand advocates with more opportunities to grow your business. Since Gen Z is particularly fond of reviews, investing in a brand-owned community now can help you address this demographic as they enter the workforce and become a larger, more frequent part of your consumer base.

Tell me what you want, what you really, really want: How online communities improve the customer experience

Your brand-owned community needs to provide helpful resources and customer benefits to truly shine. The top request from consumers? Offering better rewards for loyalty — 49% of respondents said that would make a brand community more appealing.

Yet there are other opportunities for brands, from providing unique offers to self-service automation. Among respondents, 39% said better self-service support would make brand communities more appealing, with 36% believing exclusive benefits would also be enticing.

Customers also embrace sharing their experience with the brand, whether helping other users or offering product ideas. About a third (32%) like the enhanced knowledge-sharing aspects of communities, and 31% welcome the opportunity to contribute product development ideas.

What this means for your brand

Retail loyalty programs boost the customer experience and improve customer engagement metrics. Rewarding super users – individuals who use communities frequently and are more advanced than most others – is effective and encourages positive word-of-mouth reviews from trusted sources. These rewards can take many forms. You can offer exclusive content to your super users. Early adopters and frequent advocates can get incentives, like early product access. You can gamify your user experience through tools like badges or attributes, creating an ongoing drive for customers to reach new levels. It’s far easier to conduct a loyalty program within an owned community, too. You have logins, opt-in information, and other key insights all on your platform, rather than relying on public channels or in-store data.

Brand-owned communities give your super users, fans, new customers, and prospects a space to connect. They help answer questions, offer authentic feedback about their experience, and provide a welcoming environment. These communities are one of the most impactful ways to gain customer trust while seeing an increased customer retention rate.

Additionally, an online community serves as an ongoing focus group. You can easily capture product ideas, enhancement requests, and how people use your product. If you’re receiving a lot of similar requests, you can prioritize their implementation, giving both super users and newer customers an enhanced product that best fits their needs.

Trust us: Embrace feedback and transparency

Customers have no hesitation about contacting brands online — 84% of respondents have reached out to online brand communities for customer service and support or to identify answers to questions and helpful resources. 68% have done so at least a few times per year, with nearly one in four (23%) contacting brands at least once per week for support issues, questions, or resources.

Customers also say communication is a vital part of the customer experience, with 68% believing it’s important to have the ability to offer feedback to a company or brand.

Collecting that feedback is only part of the equation, however. Customers demand transparency from their brands — 92% believe it’s important. In both instances, millennials are more likely to consider the ability to give feedback and the brand’s transparency as crucial components of the customer experience. 58% of millennial respondents believe transparency is “extremely important” (compared to 53% of all respondents), and 77% of millennials would recommend a brand because it offers a helpful online brand community (compared to 66% of all respondents).

When customers offer that feedback, they want to be heard without much of a delay. Among the respondents, 86% expect a response to a customer question or complaint within one day. Additionally, U.S. customers require a bit more speed than their U.K. counterparts — 17% of U.S. respondents expect a response within 30 minutes, with 10% expecting that response within five minutes, compared to 10% and 5% of U.K. respondents, respectively.

What this means for your brand

Creating open avenues for conversation while also being transparent with customers goes a long way. The need for unpopular changes is a part of nearly every business, but brands can maintain trust — and purchases — from customers if they are proactive and communicative about any significant updates.

Regardless of location, companies need a digital engagement tool that ensures they don’t miss any customer conversations, whether direct chats or online feedback about their brand. It could be the difference between keeping customers around and pushing them away.

Millennials will be 75% of the workforce by 2025 — their preferences are worth paying attention to. They’re even more likely to recommend a brand that offers a helpful online brand community because it easily addresses their needs. Communities provide brands with a platform for transparency, they offer room for constructive feedback, and they allow users to get and give answers about their product experience.

With a community, you’re also nurturing customers throughout their entire journey. Here’s a very common scenario: A millennial shopper comes to your site with a question about a product issue. They find other users who have solved that problem and have shared their experiences. They learn about a new product application and buy more of it or purchase an add-on to enhance what they already own. Once they’ve received their new products, they come back to the community to share what they’ve learned. And all of this is on a platform that your brand owns, giving you access to advanced data and insights like never before.

Building customer loyalty

You can’t establish customer loyalty in a day — but we’ll help you build the foundation. Download the Khoros Brand Confidence Guide for insights on how to improve customer relationships, see brand community examples, and learn ways to gain customer trust.

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