The Crucial Role Brand Loyalty Plays in a Full Funnel Marketing Approach


This is the fourth in a series of articles describing the rationale and methodology behind the Hanlon Full Funnel approach to marketing. In the first three articles, the awarenessconsideration, and preference stages were addressed. Together, they represent a decision maker’s journey from knowing little to nothing about a brand, product, or service to researching its benefits and unique characteristics, and then finally making a determination as to whether to select it.

Some funnel-style frameworks end at that point. A lead was generated, qualified, nurtured, and ultimately converted (i.e. they made the decision you intended them to, such as signing up for a service or buying a product). But, the Hanlon Full Funnel extends past conversion into brand loyalty and advocacy activities.

Why Are Loyal Customers So Valuable?

It’s well understood across industries that existing customers are more valuable than new customers. New customers have little allegiance to your brand. They haven’t formed a stable relationship with you and are likely to be easily swayed by competing offers.

By contrast, loyal customers become repeat purchasers, are willing to pay a premium for your offerings because they trust and admire your brand, and will become crucial in the later advocacy stage of a full marketing funnel by spreading positive word-of-mouth recommendations.

These advantages don’t just translate into goodwill, they directly impact your ROMI (return on marketing investment). According to the consultants at Bain, loyal customers spend 67-percent more than new ones. Similarly, McKinsey found that satisfied customers are more likely to upgrade or add services and are less likely to cancel.

“Loyal customers become repeat purchasers and are willing to pay a premium for your offerings because they trust and admire your brand.”

Brand loyalty is generally defined as positive feelings about a brand that make an individual more inclined to engage with it. The crucial point, however, is that these feelings will persist regardless of a competitor’s actions. In today’s digitally-enhanced marketplace, where access to goods and services has never been greater, that is a potent competitive edge.

Reducing the Impact of ‘Serial Switchers’

There was a time when most consumers were extremely loyal to their brands. They only washed their dishes with Dawn, every gadget in the house was made by Sony, and when they ordered a Coke and the server asked “Is Pepsi, ok?,” they requested water instead.

Marketing professor at Kent State University Chris Groening illustrates the concept this way: “Would your customers inconvenience themselves? That means, would they pay more for your product than for a similar product from another company? If so, then they’re being loyal. Would they drive further passing the competitors store to buy the product? If so, then that’s loyalty.”

“Loyal customers spend 67-percent more than new ones.”

Yet, that reality is quickly fading. More and more consumers are now classified not as brand loyalists but as “serial switchers,” who are more motivated by deal-hunting and novelty-seeking than forming long-term relationships. Which is not to say the loyalists have disappeared completely, but they are fewer in number and more difficult to court.

That’s exactly why the Hanlon Full Funnel system was developed: to boost a firm’s roster of die-hard fans by ensuring positive experiences across all touch points and consistent branding.

Give Them a Reason to Stay

There are many tools for engendering loyalty, but foremost among them is managing customer expectations and creating incentives for them to continue interacting and transacting with you. Customers aren’t loyal to brands that routinely fall short on their brand promise or fail to provide a benefit for their allegiance. In fact, 30-percent of consumers say they switch providers when they feel there is no reward for their loyalty.

That explains why so many brands today have developed loyalty programs, such as frequent flyer plans, hotel frequent guest benefits, and credit card points systems. Not only do these programs create financial incentives for repeat purchases, but they keep your audience more engaged with you. According to Thanx, customers enrolled in a loyalty program visit a company’s website 35-percent more frequently than those who aren’t.

“A Full Funnel can boost a firm’s roster of die-hard fans by ensuring positive experiences across all touch points and consistent branding.”

That metric is more important than ever given that the earlier stages in the Hanlon Full Funnel are increasingly mediated over digital channels. A study commissioned by American Express found that more than 6 in 10 U.S. consumers say that their go-to channel for simple inquiries is a digital self-serve tool such as a website, mobile app, voice response system, or online chat.

Form Emotional Bonds, Build Trust, and Exceed Expectations

The key to engineering brand loyalty is building emotional connections and accentuating areas where the individual and the brand share common values. Eventually the individual begins to see the brand as a component of their own identity. They aren’t just buying Toms shoes because they like the style, price, and fit — they are buying them because they support Toms mission to help the underprivileged and want to be associated with it.

“Customers enrolled in a loyalty program visit a company’s website 35-percent more frequently than those who aren’t.”

Trust is also central to all issues related to nurturing loyalists. According to Edelman’s “Trust Barometer Special Report: Brand Trust in 2020,” 70-percent of consumers said that trusting a brand is more important now than in the past, and more than half said that the most important factor in a purchase decision was “whether you trust the company that owns the brand or brand that makes the product.”

Patti Doyle, COO at martech firm Vennli further explains: “Customers are looking for brands they can trust. And, they want to have similar brand experiences time and time again. Consistent messaging and alignment around common goals will help drive brand loyalty.”

McKinsey reports that in the U.S. auto insurance industry, carriers that have provided customers with consistently best-in-class experiences have generated two to four times more growth in new business and about 30-percent higher profitability than their counterparts with an inconsistent customer focus.

In addition to boosting your bottom line, building brand loyalty also acts as something of a moat against competitors. Newcomers hoping to break into your market will find it difficult to lure your loyal customers away even if they offer steep discounts.

The benefits of brand loyalty are numerous, and though it may be harder than ever to generate, that isn’t stopping strategic brands from finding ways to do it.


Does your brand need more superfans? Ask the brand loyalty experts at Hanlon how to energize your audience and keep them coming back.