Kristina Singleton
08-09-2025
Brand loyalty plays a crucial role in customer retention. In a climate where brand switching is more common, understanding how brand loyalty affects customer behaviour is more important than ever in helping businesses build and maintain a healthy customer base.
Once an acquired customer has developed a loyalty to a particular brand, the simplest yet most significant impact on their consumption behaviour is that they will purchase products or services from that brand time and again. Competitors will have to try twice as hard to break this connection, creating a consistent stream of business from this established customer base.
Customers become loyal to a brand that they know will satisfy their needs, and repeated successful transactions will garner trust between consumers and the brand. Not only does this encourage customers to return to the brand, but also to tune out influences such as price changes or competitor offers, prioritising the consistency of their service. This trust can also prove pivotal in helping customers forgive and forget mishaps from their favourite brands.
Consumers who trust and feel connected to a brand are more likely to recommend it to others. As advocates, this customer base provides free referrals for the brand, growing its visibility. Over time, this growing customer base fosters a sense of belonging among those who have consistently been satisfied by the brand, leading to increased engagement with promotions, social media campaigns, and loyalty programmes.
As customers become comfortable with placing their repeat business with a brand, they will develop an association between it and the positive service they receive. As a result, when new products or services are made available, they will be more likely to try them.
Understanding how brand loyalty affects consumer behaviour is only half of the battle. Customer retention is constantly evolving, and the data proves that rising costs are causing many consumers to shop around as their disposable incomes get squeezed even tighter. 40% have had to scale back their spending due to the decrease in disposable income, and almost one in five (17%) have also switched supermarkets to save on rising food prices.
On the challenges marketers are facing currently, our research also revealed:
Two-thirds (66%) of marketers say rising prices have impacted customer loyalty in the brands they work for.
70% of marketers say decreasing budgets have made it more challenging to create impactful campaigns that resonate with their target audience/consumers.
69% of marketers feel their job has become more challenging in recent months due to tightening budgets and growing expectations.
Nearly half (43%) of consumers say brands should absorb rising prices to support their customers, and 68% of marketers agree that brands absorb some of the rising costs throughout supply chains.
Our nationwide research, comprising a survey of 1,000 consumers plus 500 marketers, also explored the challenges marketers face in the current cost-conscious climate. Despite almost three-quarters (71%) admitting customer loyalty is more challenging than before, budgets continue to be cut.
In response to the current situation, almost two-thirds (64%) of marketers say the brands they work for have started to put a bigger focus on supporting customers during the current cost-of-living crisis. But what else can marketers do to help their customers during this time of need to ensure their business doesn't fall victim to the dreaded brand switch?
We know consumers have been left with no choice but to scale back where they spend their hard-earned cash – and in some cases, switch from the brands they know and love. Many are struggling, and while absorbing costs throughout supply chains isn't always feasible for some brands, there are other avenues businesses can explore to add value and help their customers save in other areas of their lives.
If brands want to maintain meaningful connections with customers, they've got to show they understand their wants and needs, especially in the current landscape.
One way to do this is by really capitalising on the data you have readily available to help elevate the customer experience. Taking a data-first approach to truly understand what your customers want and delving into their buying drivers will help you execute an effective customer engagement strategy that'll improve retention, sales, and revenue and allow you to add real value. This will lead to meaningful connections and, ultimately, happier customers.
Navigating the cost-of-living crisis can be really challenging, and hopefully our insights into the role of brand loyalty on consumer behaviours prove useful in supporting your business to establish and protect a repeat customer base. For more insights and recommendations on navigating the current climate and instilling loyalty in a cost-conscious landscape, get in touch with Ello Group today!
