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The Psychology Behind Customer Loyalty

An image illustrating the psychology of customer loyalty through a colorful wheel.

Passionate fan bases are common among sports teams, rock bands, even baby hippos. But it’s less common to come across enthusiastic fans of ecommerce brands—fans who would blindly follow certain companies and their products anywhere.

Yes, there are the Target aficionados, REI groupies, and Apple diehards that buck the trend. But few brands are lucky to attain the ranks of true customer loyalty.

For ecommerce brands today, the sad truth is most consumers go wherever the trends go. Sure, many of us—77 percent, in fact—participate in some kind of customer loyalty program. We may agree to take a punch card at checkout, or enter our email address online to stay up-to-date with our favorite brands. But how far can those basic actions go in endearing us to a particular company?

While many industry experts are quick to declare the death of brand loyalty, we aren’t giving up so easily. By looking deeper into the psychology behind customer loyalty programs, a clearer picture of how brands should be incentivizing customers comes into focus.

When you put loyalty data into marketing content, whether that be an update on their loyalty tier, a reward for reaching a new point total or just a reminder on how to redeem points, your customer engagement will increase.

Once you’re armed with a foundational knowledge of what makes your customers tick, it’s easier to understand and empathize with them. From there, you’ll know how to create and market products that will not only create a great customer experience, but also turn them into brand evangelists for life.

Understanding customer psychology

Why should you care about psychology if you’re in the world of ecommerce marketing? For starters, the secret to stronger brand-customer relationships starts with understanding your customers. And you can’t acquire those customers unless you first understand what drives them to act.

According to one study, the majority of consumers want brands to show and take an active interest in understanding their needs before they’d even consider purchasing. Talk about setting a high bar!

That’s why everything you do as a brand should take human psychology into account. Your customers have to develop an emotional investment not only in your product, but also in the brand itself. From your logo to your brand colors to the language you use on your social media feeds, everything you do plays into how they perceive your worth as a company. No element is insignificant when it comes to trying to win over customer loyalty.

Maslow’s Hierarchy of Needs

Getting into the minds of consumers is much easier if you grasp what it is that they need from your brand. Ultimately, you want that need or problem to be resolved when they discover your product. But for them, getting to that point isn’t as simple as coming across a landing page or watching a demo.

Enter Maslow’s Hierarchy of Needs, which provides a clear structure for turning human needs into five types of categories.

Regardless of which category of needs your product meets, it’s important for your target audience to feel completely at ease with one block before they move onto the next one. For instance, because many products fall into the self-actualization block, all four preceding categories must be carefully thought through and met before customers will ultimately buy in to the final tier.

As users ascend this hypothetical ladder, the steps become less vital—after all, human survival is the foundation of the entire pyramid, and it doesn’t get much more vital than that—and gradually ascend into more emotional territory. Thus, it gets trickier to cultivate brand loyalty as customers become more perceptive of and invested in what their brains tell them they need.

How you market your business through your unique branding and marketing communications will impact users differently depending on which stage they’re in. But keep in mind that it’s natural for the human brain to thrive on feeling wanted and accepted. Effective marketing will play up on messaging that caters to those desires—even if it’s just to your loyalty program.

Build a community around your buyers

Based on Maslow’s Hierarchy of Needs, customer loyalty is specifically tied to your customers’ need to feel like they belong. This feeling, commonly known as belongingness, carries with it the universal desire for humans to crave acceptance and even attention. Whether it be from friends, random social media users, or yes, businesses, people are attracted to loyalty of all kinds.

It may sound harsh, but the result of not belonging is a feeling of being left out, something no customer—regardless of their level of investment in any brand—wants. But for brands that can foster this sense of connection and community, the opportunities are empowering.

Think about it: The possibility of influencing a subset of passionate consumers who thrive on the need to belong to a community of like-minded people—people who share the same consumer behaviors and needs as each other—gives your ecommerce brand an extraordinary amount of leverage.

Side note: If this all sounds a bit Black Mirror-esque, that’s understandable. Just remember that belongingness is at its core a good and natural idea, and the most successful brands capitalize on it to create thriving, rewarding communities. There’s nothing scary about that!

Treat your loyal customers like royalty 

At the same time as wanting to feel like they belong, your buyers also want to feel respected and cared for (see the “esteem” category). And there’s no better way of giving them that feeling than by showing appreciation for them in many different ways.

Ask yourself what elements of delight you can add to seemingly mundane online interactions with loyal customers, whether it’s a special note, a bonus gift, or something else that will remind them why your brand is different.

Surprise continues to be one of the most powerful tactics in building customer relationships. And from a marketing perspective, it’s a tactic that, when used in the right context, can build your clout and foster stronger relationships with the customers whose loyalty matters most.

Act on the psychology

Because customer loyalty is so closely tied to the needs for community, belonging, and acceptance, how can you take that concept and apply it to your ecommerce marketing strategy? Here are three key campaigns that use human psychology strategically to increase your customer loyalty over time.

3 powerful campaigns to drive brand loyalty 

  • The exclusivity campaign

As we’ve seen, part of the psychological factors of brand loyalty stem from customers feeling like they belong to a community. And while you don’t want your brand to be viewed as a cult, creating a distinct personality that’s instantly recognizable—and that create a sense of belongingness—will feed into your customers’ desires to be part of a well-liked, well-established group.

When was the last time you felt disappointed that you didn’t get an invite to an exclusive company event? The WWDC keynote? A private fashion event at the NYC Scotch and Soda flagship? These events may not be intended for the average shopper, but what they deliver on is creating an air of exclusivity that feeds into our curiosity as consumers. Even getting an exclusive discount code or free gift helps validate our consumerist instincts, subtly coaxing us to believe we’re part of a unique community and encouraging us to remain loyal to the brand that sends out the offer.

Case in point: When the once-in-a-lifetime eclipse rolled around during the summer of 2017, Casper designed an event that was as outlandish as it was hard to get into. Because the company has such a massive following, they knew the buzz they’d receive would make it worth hosting such an extravagant meetup.

psychology of loyalty programs outdoor voices

In their invite emails, which went out to their entire customer base, Casper used words like “experience” and “exclusive” to make their customers feel like they were irreplaceable parts of the company, even if they were ultimately just one in a million.

  • The gamification campaign

Creating urgency for a customer to take action whether it is via an exclusive offer, like we show above, or creating an opportunity for a customer to redeem points for a gift, ultimately marketers rely on gamification to increase engagement and revenue.

By adding gamification to your customer loyalty program you are creating FOMO for your customers.  Travel brands leverage FOMO to get customers to spend more money and to reach higher tiers in their loyalty program.  By highlighting the benefits at each tier makes customers fear that they are missing out on desirable features of the program (e.g. early boarding, free checked bags, etc).

Retailers have created similar gamification techniques where customers in certain tiers get access to new releases, faster checkout, or a free gift.

  • The referral campaign

Sharing is caring, and nothing says you’ve made it as an ecommerce brand quite like your customers singing your praises from the rooftops. But understanding what might motivate them to do so (other than providing a fantastic product and customer experience) will help you rake in those referrals and turn them into loyal customers.

The psychology of persuasion can’t be underestimated. Just as Google Reviews and Yelp have created a culture of people checking reviews before agreeing to visit a certain restaurant, online shoppers are also careful to purchase unless they’re certain there’s enough social proof to back up their investment. And few things are as persuasive as someone they know telling them what they should or shouldn’t buy.

In fact, 84 percent of consumers swear by word-of-mouth recommendations, so your chances of hooking new customers by relying on the influence of current ones are extremely high.

By creating a referral program that prioritizes your current customers’ needs (exclusive discounts, for instance), and making the effort on their parts minimal, your opportunities to get the word out about how great you are will skyrocket.

psychology of loyalty programs goby

We love the simplicity of Goby’s rewards program, which ties the referral incentive directly to their product. Offering a free trip to Jamaica when you’re a toothbrush company wouldn’t make a lot of sense. But offering a free brush head? That’s just what their customers would want and expect.

Use the right tactics for the right audience

As interesting as it is to dig into the psychology of customer loyalty, not every customer possesses the same needs. Your buyers are all unique individuals, and they have different preferences and motivations. Think about the difference in shopping styles between baby boomers and millennials, for example. One practically brought about the online shopping revolution, while the other is still trying to keep up.

On a more granular level, research shows that Gen Zers feel less enthusiastic about shopping altogether, focusing on quality rather than the rush that a quick buy might give them. They’re also less enamored with loyalty programs, so targeting them with a one-size-fits-all approach isn’t going to get the job done.

These are the other data inputs that will help you set your own customer loyalty strategy. You have to thoroughly understand and dig into your own unique buyers’ psychology as you try to incentivize brand loyalty. When you prioritize the research process and get to know your audience as much as possible, your customer loyalty strategy will come into view more clearly. Rather than guess what works and why, you can use deep insights into customer psychology combined with in-depth research into buyer personas. With the right knowledge, you too can build a successful brand with a loyal, devoted following.

Special thanks to our friends at Zaius for their insights on this topic.
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