What is the Difference Between Brand Loyalty and Customer Loyalty

The main difference between brand loyalty and customer loyalty is the pricing factor. Pricing is a major factor in customer loyalty, but not in brand loyalty. Customers with brand loyalty are likely to buy products regardless of the price.

Brand loyalty and customer loyalty are two inter-related concepts that are important in customer retention. Since these are two different concepts, you can’t use the same strategies to raise your brand loyalty or customer loyalty.

Key Areas Covered

1. What is Brand Loyalty 
     – Definition, Features
2. What is Customer Loyalty
     – Definition, Features
3. What is the Difference Between Brand Loyalty and Customer Loyalty
     – Comparison of Key Differences

Key Terms

Brand Loyalty, Customer Loyalty

What is Brand Loyalty

Brand loyalty refers to the tendency of some consumers to keep buying the same brand of goods even when they have choices of competing alternatives. Consumers continue to buy from a company not because the brand is the only option but because they trust the brand. Brand loyalty mainly involves how consumers perceive the brand. Consumers stay loyal to the brand because they feel that the brand is trustworthy, offers better services and high-quality products compared to all other brands in the market. This may be through reputation, various promotional activities, and customers’ previous experiences with the company or brand.

Pricing is not a major factor in brand loyalty. Customers with brand loyalty will also buy various products from the brand regardless of the price. Although customers loyal to the brand tend to make fewer purchases, the profit margins on the products they buy tend to be a lot bigger.

What is Customer Loyalty

Customer loyalty can be described as customers’ faithfulness and commitment to a company or brand. It stems from excellent customer satisfaction. When a customer has a good experience with the company and its products, he or she will be willing to buy the same products over and over.

Customer loyalty is different from brand loyalty. Unlike brand loyalty, pricing has an effect on customer loyalty. In customer loyalty, if the prices of products go up to unacceptable levels, customers may go in search of alternative products. Therefore, customer loyalty is also associated with the overall spending power of customers. It involves what the company can offer customers in terms of regular prices and money-saving offers. If the company offer lower prices than their competitors or better discounts for certain products, customers are likely to stay loyal to the company.

Difference Between Brand Loyalty and Customer Loyalty

Definition

Brand loyalty refers to the tendency of some consumers to keep buying the same brand of goods even when they have choices of competing alternatives. Customer loyalty, on the other hand, refers to customers’ faithfulness and commitment to a company or brand.

Pricing

Pricing is a major factor in customer loyalty, but not in brand loyalty. Customers who are loyal to the brand are likely to buy products regardless of the price. But with customer loyalty, if the prices of products go up to unacceptable levels, customers may go in search of alternative products.

Nature

Brand loyalty involves customers’ perception (positive image) of the brand, while customer loyalty involves products and services that fit their needs and budgets.

Marketing Strategy

To instil brand loyalty, the company should offer high quality products and services, but to instil customer loyalty, the company should offer low prices, discounts and promos.

Customer Retention

Customer retention is high with brand loyalty but low with customer loyalty.

Profit Margin

Brand loyal customers will buy fewer goods, but these have a high-profit margin, whereas loyal customers will buy more goods at lower prices, resulting in a lower profit margin.

Conclusion

The main difference between brand loyalty and customer loyalty is the pricing factor. Pricing is a major factor in customer loyalty, but not in brand loyalty. Brand loyal customers are likely to buy products regardless of the price.

Reference:

1. “How Do You Define Customer Loyalty?” Customer Insight Group, Inc., 23 Feb. 2021, Available here.
2. “What Is Brand Loyalty? Definition & Examples.” Emarsys, 11 Feb. 2021, Available here.

Image Courtesy:

1. “Car-company-logos-main-image” (CC BY 2.0) By Siddhartha Thota via Flickr
2. “4625650” (CC0) via Pixabay