Updated: Aug 17, 2022
TRANSCRIPT: Hey, guys, it's Brandon Bain, and today I'm here to talk to you about something that's important to us. It's a core fundamental of our business and it is the three stages of consumer loyalty. This is a page it's in there, downloaded manual for marketing strategy.
That's free if you want to pick it up. Feel free to do. It's a lot of really good tips and tricks and how to start your own marketing strategy. But the three stages of consumer loyalty discuss specifically how consumer loyalty directly correlates with long term client engagement and why it's correlated.
And it's important to know that because we all understand that the cost of acquiring a new client is ten times more on average than the cost of keeping a client. So we really want those evangelists and those people that are going to stick with us for many, many years.
And there's a lot of other advantages we'll go into soon. There are three stages and we'll start at the bottom. We believe that it's a pyramid for a reason that each one stacked on top of one another. So, for example, you can't have Brandon assistance.
Someone can't champion for you until they prefer you, and they can't prefer you until they know you exist, right? So the very bottom, you have brand awareness. Then above that brand preference and then above that brand's insistence on the left side, you'll see what type of companies get brand awareness.
These are price driven companies. The question that they're asking themselves are How can we make more money? Every company needs to go through this stage. They need to understand the core fundamentals of pricing strategy and optimizing their infrastructure to keep costs low and keep profitability high.
Understanding margins so profit and loss, you have to have a foundation of finance, right? But if that is your core focus and that's all you focus on delivering value, delivering low price, the red ocean model, right? We're trying to keep costs where we're trying to produce value, then your brand loyalty is going to be very minimal.
You're going to know you exist and they're going to buy you because you're the cheap one, but they only stay around as long as you're the cheap one, right? So as soon as they get a better value somewhere else or a cheap one, someone else, somewhere else, they split.
So it's a very low level of engagement with the company, core values and a very fickle relationship, if you will. Let's move up the ladder to brand preference. These are product driven companies, but they're also service driven companies.
They're performance driven companies. These are companies that are trying to take a problem and create the best solution for it. And we're going to make it better, faster, stronger, more durable and pack more features into it. Solve this problem in a better way.
These this is most of the companies out there. Most the company are trying to improve and innovate, and they're trying to do it to create differentiation and create a bigger market share. It cost more money. But people buy it because it's a better product.
So you have better features. You know, it costs a little bit more, but people will pay a little bit more for those better features if it makes sense and solves a problem for them. OK, now how long do they stay?
Well, they stay about as long as till the next company comes along. That solves that problem just a little bit better, or they approach it in a different way. Maybe instead of having to own it, they you can just access it in the cloud.
Think of Netflix or blockbuster model owning a DVD. There's a lot of product driven companies out there. Model works because it's got a good foundation of finance, and they understood how to drive, cost down and maintain scalability. And then they've improved their product to gain market share.
So that's the second level product driven companies. They keep clients for as long as they can continue to innovate and keep the product performing better than their competition. So it's always kind of a race to stay ahead of everybody else in terms of features and solutions.
A lot of companies, they strive to get there, and that's where they end up. But I'm here to tell you that those companies that are driven from a core purpose are the only ones that get brand insistence. Core purpose is a mission statement of core mission.
We are here to do something that solves a global problem or a problem that's in the economy, or we're trying to solve an issue that that concerns us beyond our own company. The way that this works is for people that have brand insistence.
They will stay with you, your company as long as you are true to your mission and your values publicly. So think of Toms shoes, for example, there are one that we'd like to point to. They were doing a buy one, donate one model, so every pair of shoes that was purchased, it would donate to someone that didn't have a pair of shoes and that create a lot of evangelism because people believe in the cause. They didn't buy the shoes because they were better. Most people thought they were just regular shoes. They didn't have any sort of they weren't more comfortable.
They weren't, you know, faster, stronger, better. They were operating from a core principle that you can have good shoes, their quality right, but you can do great things in the community. We can help solve problems and. We'll stay with you as long as they believe in that mission and that the company is true to that mission.
I think that most people don't ever get here because they're either a they don't create the mission or B they are concerned about projecting the mission. If you're really good, if you're a good human being, do I want to be talking about all the good we're doing?
Well, companies that are purpose driven, they are not shy about trying to be a lightning rod for their cause. Let's say that you're trying to, I don't know, cure cancer. Well, they will have a mission. We want to cure type of cancer within X number of years, which is going to take X amount of dollars and X type of research. And we're going to contribute X amount of, you know, percentage of our profit sharing. And we're going to try to raise X amount of awareness. And they are constantly driving that because they want to be a lightning rod.
They believe that the more attention they can get to the cause, then the more eyes on the problem they can have and the more power they can generate towards their efforts. And as long as they are true to that mission, people are going to support them, and the people that support them will stay around as long as
they believe in that cause. And as long as a company steward that mission, they're going to stay around forever. They're going to buy their products over someone that maybe has a little bit better product. Think of Tom Cruise again.
Loyalty. Right? We operate on the limbic system, so this is where it gets into a little bit of psychology. But the limbic system is our emotional driver. It's the system that's responsible for feelings of trust and loyalty. The neocortex is our frontal brain, and it's responsible for higher order thinking like logic reason.
It turns out that logic and reason is not the drivers of our buying decision or buying behavior at all. We're not Spock looking at two data sets saying We'll take this one because it's more logical. All of our purchasing decisions come from feelings of trust, which is all based on our lizard brain.
And so it's based on emotion, and that's why there's a higher level of engagement and loyalty when it comes to purpose driven companies because they're not operating from a product, they're operating from a belief system. So a couple of steps to help you get started and doing this step number one is identify what you believe in as
a company and how does it match the product you're selling? OK. Number two, how is your efforts going to help solve this problem, whether it's a micro scale or macro scale? Simply raising awareness can help contribute to the cause.
It can be donating. It can be like the one for one model. It can be a percentage of profits. It can be sharing as much as you can about the cause. So there's a lot of ways to do this.
So and then having a way that you can track and show people the impact of what you're doing, all these things matter and cause marketing a matter for companies that aren't just big brands, but any brand can size.
Brand can do this if you don't just have to be American Express writing a check for March of Dimes and and generating a lot of cause marketing through a big financial contribution, you can be doing this on a small scale and the rewards are proportional, so it will impact your business.
And we do recommend doing the right thing and the good thing because it is the right thing to do, not just because it is the most powerful type of marketing, although that is true. So anyways, I hope that this gave you a little bit of something to think about on loyalty and kind of stepping back and integrating this into your brand and your marketing strategy. If you have any questions, feel free to leave a comment below or shoot us an email. We love to talk to you about what you're doing. We'll talk to you soon.
My name is Brandon. Have a great day.