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The Power of Emotions in Customer Loyalty

Increasing customer retention is a known goal for any business, as it’s the gateway for sustainable growth. We ask, what part does emotion play?

Customer experience research experts, The Temkin Group have found that positive emotional experiences are closely tied to customer loyalty. In their recent paper, they carried out a consumer-wide survey which identified that even a moderate increase in improving customer loyalty can generate an average revenue increase of $823 million over three years for a company with $1 billion in annual revenue. Whilst it’s hard to quantify emotion as a metric, it can still be viewed as the linchpin of measuring the success of a loyalty reward or program.

In today’s world of heightened consumerism, loyalty can be fickle or shared, and so retailers have to step up and show their customers how vital and valued their custom is. In short, real loyalty is driven by emotion — feelings of trust, satisfaction, and reward.

Corporate Social Responsibility (CSR)

In recent years, and with changing political climates, CSR has become more prominent. Customers don’t just want to be associated with a brand’s products, they want to feel connected to its values and charitable activities. They want to feel that their views and beliefs are aligned with the brand that they shop with and are loyal to. Enter a strong CSR message.

According to a white paper by Annex Cloud, 93% of consumers are more loyal to companies that engage in corporate social responsibility and 66% of global respondents are willing to pay more for products from companies dedicated to social change.

Swedish brand H&M made use of raising their profile on CSR. Through its Garment Collecting initiative, the Swedish clothing company has recycled 25,000 tons of old and unwanted clothing since 2013, and has partnered with the International Labour Organisation(ILO) to bring fair wages for its textile and factory workers abroad.

Work like this can help win customers who have strong feelings towards sustainability, helping to evoke positive emotion towards the H&M brand.

Advocate Marketing

Here’s a comprehensive promotional strategy in which a company gives a subset of its customers the motivation and solutions necessary for them to amplify their positive opinions of the brand.

The framework of advocate marketing can be thought of a systemised way to incorporate emotion. It covers aspects like connecting your brand with social media, referral programs and loyalty scheme and reviews all of which are enhanced through social sharing.

With advocate marketing the potential for a brand is huge. Think of influencers on social media and brand advocates. According to social marketing experts SocialToaster, the average social media user is connected to 400+ friends and family.

From their research with the clients they work with, they found the actual number of connections are on average over 600+ friends, families and colleagues which meant that for every advocate you have sharing your content, that content has the potential to reach 600 individuals – not to mention the friends of those individuals:

10 advocates = A reach of 6,000

100 advocates = A reach of 60,000

1,000 advocates = A reach of 600,000

While products themselves come first – having the best customer experience whether online or off is key to standing out from your competitors. What many fail to consider is the emotional experience, which essentially goes hand in hand with CX.  It’s clear that the retailers that have become more concerned with this nuanced topic are the ones which are winning in the eCommerce and retail game.

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