Is it the quality of the product or having a positive customer experience that creates brand loyalty?
For 76% of customers, how they are treated by brands is as important as what is actually being sold, according to a study commissioned by Lithium Technologies.
The survey of 1,000 adults found that creating this kind of brand loyalty can be lucrative for brands. A happy customer is willing to spend £50, or around a quarter of their disposable income, on their favourite brands a month.
The value of happy customers
If customers feel a connection to a brand, they are often willing to spend more than they usually would.
Of those surveyed, 41% said that they would be willing to buy a product they considered to be inferior to other options in the market if they loved the brand. 68% said they will spend more money on their favourite brands.
Lithium estimate that this equates to around £2.5 billion in monthly disposable income that consumers are willing to spend on their most treasured brands.
No second chances
Importantly, the study also showed the damage that a negative customer experience can have on a company’s reputation. 65% of respondents reported that a single bad customer experience is enough for them to swear off a brand, even if they really value its products.
This damage can often by long-term and widespread. 76% said that they are unlikely to ever use that brands products again once they feel they have been treated badly, while 57% would advise friends and family not to part with their money.
Customers value digital
One thing that was shared by the consumers surveyed was that they can all be classified as digital-first.
27% listed digital communication via a website, blog or social channel as their preferred method of communicating with brands. 60% consider not getting a response on social channels to be a bad experience.
“Customers increasingly high expectations of brands have reached a critical point,” Rob Tarkoff, president and CEO of Lithium Technologies, said. “When three quarters of consumers say they are unwilling to stick with a brand that has treated them badly even if they love the brand’s products, it is time to sit up and take notice.
“It’s a wakeup call for brands to realise that providing great experiences on digital experience is the surest path to attracting and retaining happy customers.”