Maximizing the lifetime value of a customer is why loyalty is so important.
The lifetime value of a customer is a metric that many companies use to analyze marketing expenditures. It’s the reason gyms offer a first month for free, or your phone or cable company will reduce your rate plan if you threaten to leave for a competitor. Companies know that it’s more cost effective to retain an existing customer than recruit a new one.
Consumer knowledge of your brand’s values drives brand preference, increases loyalty and can be a differentiator.
Conscious Consumers are a loyal bunch, and they’re valuable to businesses. Our 2015 Mintel study showed that 51% of American consumers will pay more for a product with a values-based component. (To download this study, click here.) Whether the value is related to a social cause, environmentally friendly or more healthful, as long as it aligns with what’s important to the consumer, the brand will benefit. An additional 40% of consumers will not pay more, but will prefer a brand that offers a values-based benefit, all other things being equal.
Regardless of the specific values your brand holds dear, there are four characteristics that will help you increase loyalty among these Conscious Consumers who are willing to pay a premium for your product:
From the supply chain to manufacturing processes to employee welfare, Conscious Consumers want to know that your business practices support their personal objectives, which are included in our Conscious Consumer definition: “I consider issues of health, environment and social responsibility when I make decisions.” Ethical brands that truly do good because it’s what they believe in will benefit, while brands that convey doing good for business gain will lose.
People like to know what to expect. This relates to your product, your customer experience and your values. For example, Ben & Jerry’s would create a firestorm if they started using milk from cows treated with rBGH when their product was founded on using milk from “happy cows.” Target created waves when they ceased the “Take Charge of Education” program to focus on health and wellness efforts. Consumers reacted strongly to the change even though Target continued supporting a cause.
Commitment to values, whether it’s the way your product is manufactured, paying employees a living wage or a charitable partnership, will raise eyebrows if it is not consistent and will increase loyalty if it is.
Being consistent also shows that your commitment to a value is genuine. When Chipotle discovered that some of their pork producer partners were not living up to the company’s production standards, they stopped procuring pork from the violating partners. It caused an uproar among carnitas-loving consumers, but it certainly demonstrated their level of commitment to their values. Consumers want to know that your values are not just lip service, but deeply held beliefs. Authenticity is key.
Transparency demonstrates that you are genuine. Consumers want proof that you walk your talk. Our 2015 Mintel survey showed that 74% of consumers want companies to issue reports on their social responsibility. 60% of those consumers will actually read the reports. Corporate social responsibility reports are an opportunity to tout all the values-oriented benefits of your brand and give Conscious Consumers a peek behind the curtain of your operations.
To increase loyalty from Conscious Consumers, make sure these four characteristics are part of your strategic planning and communications planning discussions. Many companies are doing good things but not promoting them. Even simple acts of corporate social responsibility that seem insignificant to you might drive a consumer to select your brand over the competition. If you need help identifying opportunities to build Conscious Consumer loyalty by promoting your brand’s values, email us at firstname.lastname@example.org.