Beyond the transaction: An evolution of the brand loyalty playbook

My colleague Vicky Agromayor, a brand strategy manager on our Consumer & Commercial brands team, recently wrote an interesting article about brand loyalty. In the article, she highlighted some recent community and experience-focused initiatives by popular apparel brand Lululemon which, as she eloquently put it, seem to be “transcending the confines of traditional retail loyalty tactics.” 

These recent initiatives from Lululemon included things like exclusive ‘members-only’ dinners, and free clothing swaps (called ‘Dupe Swaps’), where anyone who purchased a fake product could exchange it for an authentic one. These unique tactics from Lululemon nod to the brand’s dedication to its customers, its drive to cultivate a community, and inspire brand loyalty.

But if Lululemon’s recent efforts teach us anything, it’s that creating loyalty may demand brands go to greater lengths with their marketing efforts than ever before – because as Vicky puts it, “genuine retail loyalty is not cultivated solely by offering discounts or accruing points.” 

Brand loyalty today
As a qualitative researcher, I’m fortunate enough to hear from consumers on a regular basis, and one sentiment I hear frequently is “these days, I’m only loyal to my wallet.” It’s understandable that the modern consumer mindset gravitates towards frugality in these economic conditions, right? Everyone is navigating inflation, categories are becoming highly saturated which offers an abundance of viable options, e-commerce makes most things readily available, and the list goes on.

Brand loyalty, tomorrow
In this marketplace filled with very savvy and highly price-sensitive consumers, what should a brand be thinking about as they strive to create loyalty? What is it about unique community/experiential initiatives (like Lululemon’s), that makes them capable of having a true impact? Most importantly, what are these types of efforts making customers feel?

The answer seems to be that, now more than ever, brand engagement needs to be rooted in a sense of giving to the consumer, with no expectation by the brand of receiving anything in return. The moment a brand requests something from the consumer is a moment of inherent risk, potentially leaving consumers feeling taken advantage of – a sentiment that quickly erodes any sense of loyalty. Giving consumers a reason to believe (and thus feel) that you truly value and appreciate them, for more than just their dollars, cultivates a strong and enduring relationship with consumers and solidifies the overall sustainability of the brand.

Here are three recommendations to consider as you think about driving loyalty, and creating a dynamic where the consumer will feel the relationship is truly reciprocal (and arguably in their favor):

1. Create separation between loyalty-driving initiatives and those intended to drive transactions. These are two distinct goals, and any focus on transactions has the potential to undermine loyalty-building efforts. Keep them separate and remember that fostering loyalty is about building relationships, and relationships don’t come at a price.
2. Know your customers and identify what will make them feel valued. Understand what they want to see, hear and feel from a brand. What do they care about? What are the shared brand/customer values? What is the most authentic way to speak to and act on those values? And in case an analogy helps, if you’ve ever heard of ‘love languages’ used in relationships, the idea works here as well. Figure out your customer’s love languages.
3. Recognize that building loyalty with everyone is an unrealistic goal, and targeted efforts are key. Focus on specific groups that are most poised to be loyal to the brand and engage them deeply. Not only does a more targeted approach amplify the chance to drive feelings of being special/VIP, but it helps mitigate risk of diluting your efforts.

Current market conditions are redefining the consumer <> brand relationship, prompting a need to reexamine how that relationship is shaped. Consumers demand more, and it’s time for brands to live up to their expectations.