Behavioral Loyalty vs. Emotional Loyalty
Most business have a framework, for measuring emotional loyalty. Also, there are a lot of easily applicable methods and tools to track emotional loyalty. These include brand love scores, brand closeness metrics and often NPS is used as a proxy for measuring how customers feel about a brand.
The challenge is emotional loyalty is ultimately just a driver for what brands and businesses really want – behavioral loyalty.
How customers feel is sometimes different from how they act, but how they act will drive the business.
Over focusing on emotional loyalty can leave brands vulnerable because:
- emotional loyalty is a driver for behavioral loyalty, but not the only driver. Price, competition, convenience, and other factors also drive how customers act.
- Most emotional loyalty metrics don’t explain why customers do or don’t feel loyal, leaving the brand information but limited insight to act.
- Emotional loyalty alone usually is not correlated to business outcomes. Analytically speaking, we believe you should start with “What” and then “Why”. What happened (or what is predicted to happen) and why did it (or will it) happen. Measuring emotional loyalty and not behavioral loyalty gives you a partial answer to “Why” but not to “What.”
Behavioral loyalty is not re-purchase rates or repeat buyer percentages. Some customers buy again because of an incentive or discount – but take away that incentive and they are gone. Some customers buy again because of the campaign in the market, remove that campaign and they won’t come back. These are repeat purchaser behaviors, these are not loyalty behaviors.
These customers are self-interested, they are not self-motivated.
Behavioral loyalty measurement quantifies self-motivated brand and product preference. And once that is quantified (the what) then it can be qualified (the why) which can be emotional and/or rationale drivers.
Behavioral loyalty is often overlooked because it is a more bespoke metric when compared a brand love score, but it is driven by two core principles.
- Customer Retention: How likely and for how long is a customer going to continue to buy.
- Customer Investment: How much does the customer need incentives to continue to buy from us?
Using a variety of methods (e.g. survival analysis, etc) we can forecast for customer retention and contrast that against investment per customer.
Understanding Behavioral loyalty allows business to better target their investments, figure out how to lower costs by turning repeat buyers into loyal customers and to delve more deeply into Why across behavioral loyalty segments.