You can’t build brand loyalty on price
‘Cheapest’ is not a strong platform to build your brand loyalty on. Despite evidence that (some) budget brands are weathering the economic storm with greater success than more expensive rivals, a low price rarely nurtures loyal customers.
There’s no doubt that price is always a factor when customers are making a purchase – whether it’s a new pair of shoes or the services of a solicitor. But too many businesses (especially start-ups) too often look at price as the route to winning new business. It will certainly attract new customers, but they will almost certainly leave you when they find a cheaper option. Their brand loyalty is to your price, not your brand.
What the successful budget brands recognise is that to build brand loyalty, they need to offer their customers something more than just ‘cheap’. Primark sell cheap clothes, but they’re very good at following fast-changing fashion trends, and having a high turnover of new products, so there’s always something new to look at. Aldi are well known for a bargin, but they have also been voted Which? ‘Supermarket of the Year’ for the second year running in 2013.
A budget brand that has come to realise this too late in Ryanair. They’re well known for their cheap prices, but also their terrible customer service. When business was good this wasn’t a problem, but as passenger numbers have dropped over the past 12 months, the budget airline market has become much tougher, leading Ryanair to issue two profit warnings in 2013 and announce a change of attitude to customer service. They have recognised that price alone is no longer enough to win business, and that given a choice, customers will take their business to competitors who offer more than just ‘cheap’. If they want to build customer brand loyalty, the Ryanair brand has too stand for more than cheap seats and poor service.
There’s nothing wrong with being a brand that’s ‘cheap’ (assuming there’s a business case that supports that price positioning), but to build customer loyalty you need to identify a set of values, that will deliver a customer experience that will keep them coming back. So when you look at your business, what are those brand values? And how do they influence your customer experience?
If you would like to have a chat about building your brand, do get in touch. It would be great to hear from you.
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