Why Brands Should Cultivate the Habit of Customer Loyalty...
Photo by Hanny Naibaho on Unsplash
Habit.
It’s how we live our lives. Making most of our decisions on autopilot, based on past experience.
So it seems entirely logical to focus on making a brand a habit, an automatic purchase.
As a long time practitioner of customer loyalty, this can seem like I’ve turned to the dark side.
Why habit is key to developing customer loyalty
Both habit and customer loyalty deal with repetitive behavior. Yet they feel like two separate tracks.
Customer loyalty is generally seen as a measure of a customer’s likelihood of continuing to do business with a brand over time. While habit is considered an automatic pattern of behavior, triggered by contextual cues.
Within customer loyalty, there’s always been recognition that a good deal of loyal behavior is the result of convenience or habit, rather than any commitment to the brand. However, building attitudinal loyalty is considered the main prize, where positive attitudes and attachment to the brand consciously drive repeat purchase. Indeed, for some, this is the only true customer loyalty.
Yet rather than dismissing habit, I consider it key to the pursuit of customer loyalty for three reasons:
habitual behavior is good for customers
As Daniel Kahneman has taught us, our conscious brain doesn’t have the time or bandwidth to deal with the multitude of decisions we must make every day. Instead, we make most of our decisions unconsciously, on autopilot, relying on our engrained memories.
While it may be hard for brand managers to accept, brands are hardly the most important decisions we have to make in our lives. So as we become familiar and satisfied with a brand over time, our autopilot will naturally take over, to save us effort. It’s in our interest, so it makes sense for brands to embrace it.
habitual behavior is good for brands
When a brand becomes a habitual purchase, customers don’t consider or even notice other brands. The brand is protected by a kind of moat.
Customer loyalty tends to consider this fragile, as it’s not driven by conscious attachment. However, we all know from personal experience how difficult habits can be to break. Habit can be a brand’s best friend.
habit and attitudinal loyalty are increasingly intertwined
Attitudinal loyalty assumes the brand has first to convince people that it’s better than alternatives before behavioral loyalty can develop. Yet today, initial purchase can just as easily be driven by recommendations from a friend or an influencer, or through a recommendation engine (Amazon anyone?), with little or no communication from the brand. Indeed, a recent Edelman study found nearly 80% of customers discover things that attract them to a brand and drive loyalty only after the first purchase.
So, encouraging repeat purchase is necessary not just for habitual behavior to develop, but also for positive memories to form with the brand, which are the source of attitudinal loyalty. In effect, rather than the traditional view that attitudinal loyalty leads to behavioral loyalty, behavioral loyalty comes first.
3 ways to cultivate the habit of customer loyalty
So how can the science of habit help the pursuit of customer loyalty?
There are a number of models for developing habitual behavior, but they generally come down to three components:
a cue that triggers the behavior
a reward for carrying it out
repetition until the behavior becomes automatic
If you then apply these to developing customer loyalty, it suggests three key avenues:
Design the brand for habit
These components are already built into branding to some extent. Distinctive brand assets, which enable memories to be associated with the brand, also act as cues, triggering the network of associations when they are seen. The links to specific usage occasions also act as cues, so that the brand comes to mind for a particular occasion. The brand promise, the job that it can do for customers, is the reward that the brand offers in return for purchasing it. And repetition is fundamental to branding. The brand manual or guidelines is all about keeping a consistent approach so that people learn to identify the brand.
However, viewing the brand as a habit-forming machine can take these elements further:
Design strong cues that enable our peripheral vision to identify the brand from a distance, and then guard them jealously. This may sound obvious, yet this mindset would have avoided the infamous Tropicana rebrand of 2009. Instead, an attempt to modernize the packaging inadvertently removed the two key cues that customers unconsciously used to identify the brand. It became invisible on the shelf, sales dropped 20% overnight, forcing the brand to bring back the old design six weeks later.
Make the reward promised by the brand easy for our unconscious mind to understand from the start. This can be done by linking to existing wisdom. For example, if a new brand follows the design and packaging conventions of its category, we will intuitively understand the functional job the brand can do for us without needing to think about it.
Prioritize being freshly consistent, rather than innovative. Our minds are consciously learning from the latest experiences, so if we encounter something about a brand that contradicts our engrained memories then it will trigger us to consciously re-evaluate the brand. That can spell trouble if the brand’s already a habitual purchase. Take Bud Light. The recent controversy over its use of a transgender influencer clearly triggered a large group of regular customers to consciously re-evaluate what they thought they knew about the brand. Some stopped purchasing as a result.
Develop retention mechanics to accelerate habit formation
There’s no exact number for the amount of repetition needed for habitual behavior to form, but it’s a long rather than short term process. Delivering the brand promise together with an engaging experience are of course the fundamentals for ensuring repeat purchase. But retention mechanics can help promote repetition and accelerate habit formation.
Loyalty programs are the obvious choice, and there’s good evidence that they can help habit develop through repetition, especially in situations where customers make frequent purchases. However, as I’m fond of saying, a fully-fledged loyalty program is not just for Xmas. It’s a major commitment for the business that needs to be considered against a broader set of objectives than just encouraging repetition.
There are also a raft of simpler alternatives that can be used, such as simple punch cards, newsletters, time-based incentives, etc.
Whatever the mechanic, though, it’s important to treat it as a cue for triggering and embedding habitual behavior, rather than simply as a reward. I saw this in the early days of Tesco’s Clubcard loyalty program. By sending out a reward mailing consistently every three months, clearly branded Clubcard, it prompted additional shopping trips within the next three days, even among customers who hadn’t earned a reward in the qualifying period.
Look for habit forming opportunities
Habits are hard to break when the cue remains constant, but there are times in our lives when we’re more open to developing new ones. This tends to be when our lives are in flux, such as starting a family, becoming empty nesters, or moving home. At these times, reaching out with information or incentives can help start new habits. For example, a local business providing a new homeowner with an incentive to visit.
The same is true for protecting customer habits from being disrupted at such times. For example, if a competitor is opening a store nearby, giving existing customers additional incentives to stay with your brand during the opening period can keep customers from switching.
The best of both worlds
None of this is to dismiss the importance of attitudinal loyalty. While habit puts a moat around the brand, attitudinal loyalty is more likely to drive positive word of mouth. Crucially, it helps retain behavioral loyalty when a habit is disrupted due to a change in context.
For example, here’s something I’ve seen many a time. A shopper, we’ll call him John, shopped every Monday afternoon at Trader Joe’s and Ralph’s for the week ahead. These were the local markets, but what started as a convenient choice when he first moved to the neighborhood eventually became an automatic routine, a habit, triggered by the day of the week. However, he then moved to a neighborhood where there was a Safeway closer. John now shops at Safeway every Monday afternoon instead of Ralph’s, but he still makes an effort to shop at Trader Joe’s every two weeks, even though it’s much further away.
Why? Because John found he really liked Trader Joe’s and over time strong positive memories developed, which never happened with Ralph’s. Although his original shopping routine eventually became a habit, when it was disrupted by his home move, those positive memories resurfaced and ensured he continued to be a Trader Joe’s customer. Ralph’s was simply replaced by the more convenient choice, Safeway.
The aim is to have the best of both worlds, a strong positive memory structure with habitual behavior. But achieving this requires cultivating the habit of loyalty to encourage repetitive behavior, which enables the positive memories to form while the habit is developing.
Habit and attitudinal loyalty may feel like contradictory concepts, but together they make the brand stronger.
