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Episode 42

Why Brand Loyalty Is More Important Than Ever

Kevin Krekeler
Director of Client Engagement at Mod Op
US Inflation Skyrocketed To A 40-Year High

Today’s consumers face price hikes on everything from clothing to groceries—and all the categories in between.

Can well-known brands maintain customer loyalty? Can they prevent buyers from trading down and purchasing products based on price?

“Consumer and B2B decision-making is a balance of head and heart.”

– Kevin Krekeler

Find out as Kevin Krekeler and Tessa Burg discuss the importance of brand loyalty and how marketers can cultivate it to build customer retention.

Highlights From This Episode:

  • What is brand loyalty
  • Factors that contribute to customer loyalty
  • Brands that do a great job of creating loyalty
  • What brand loyalty means for B2B
  • Industries most impacted by inflation
  • Examples of brands successfully retaining customers

Watch the Live Recording

Full Episode Transcripts

Tessa Burg: Hello and welcome to another episode of Lead(er) Generation brought to you by Mod Op. Today, I am joined by Kevin Krekeler, he is Mod Op’s director of client engagement, and I’m your host, Tessa Burg. Kevin thanks so much for joining us today.

Kevin Krekeler: Yes, thanks for having me, I’m excited to talk.

Tessa Burg: Yeah, so you are my first Mod Op coworker interview, which is kind of exciting.

Kevin Krekeler: That is exciting.

Tessa Burg: Yeah, and for everyone else, I am here in the Mod Op Cleveland office, and Kevin is in the Mod Op Dallas office.

Kevin Krekeler: Yes.

Tessa Burg: Today’s topic, super pumped about, is this trending all over the place, but we’re going to talk about why brand loyalty is so important now, and the impact, lots of factors are having on why customers are either staying, or in many cases leaving a brand. So, to open up Kevin tell us, what does brand loyalty mean, and what does it mean to you?

Kevin Krekeler: Sure, sure, I mean, I think at its core, brand loyalty is someone’s connection with a brand that extends well beyond a product or service. Let’s call it an emotional connection, really. The phrase brand loyalty I think has become, shall we say, a little diluted over time, because in our industry now, whenever you hear brand loyalty, you immediately think about it in terms of, some kind of customer rewards program or some incentive, that’s intended to drive recurring transactions. However, I’d say that there’s a very distinct difference in those two things, right? Brand loyalty the way I think that we’re gonna talk about it today, is really about creating brand advocates, people who have a pure affinity for your brand, versus just developing some kind of program that is just about supporting additional purchases.

Tessa Burg: Yes I agree, I actually spent five years at a startup where we created software for customer loyalty and brand loyalty programs, and there really are those two types, people who are very transactional and see the brand in a transactional way, and those who are emotionally attached to the brand, and it would take more to have them switch. So tell us, you’re on the front lines with a lot of our clients, like, what are they talking about as it relates to customer attrition and customer switching, what are they seeing, what are they worried about?

Kevin Krekeler: Yes, so that’s, you know, it’s an interesting question and an interesting topic that we have, you know, my primary responsibility at the agency is to connect it with great new opportunities, and so we have lots of different types of conversations with folks on all different levels of their organizations, and then, you know, for the last, you know, better part of the last 15 years spent on the account strategy side, and so I have kind of put our heads together with our clients on the same topic, and I think that at the, you know, at its core, brand loyalty has always been tied to the overall experience that someone is having with the brand, right? So we talked about it from this emotional aspect, I do think that over the last few years, that while functional aspects have always been a factor or factors in people’s loyalty to a brand, maybe they’ve bubbled to the surface even more just given economic circumstances, the pandemic, things of that nature.

Tessa Burg: So, inflation and the pandemic has certainly had an impact on brand loyalty, and what have been some of the outputs of that, plus Amazon, that has really sort of changed the way people experience those fun functional aspects of a brand?

Kevin Krekeler: Yeah, so, that is interesting to me, not just as a professional, but also as a consumer, right? So, when I think about the pandemic and now inflation, as things that are testing people’s brand loyalty, I think about what people were looking for in those times, or are continuing to seek, right? In the heart of pandemic, whether you were a small business or a large established business, you were all going through some kind of challenge, and I do think that there was a point within the pandemic that people were on this search, right? For normalcy, they just had enough, and in that quest for normalcy, they went back to the known established brands, why? Because things you know give you a sense of comfort and expectation, and those are the kind of things that beyond just your shopping behaviors, give you comfort in uncertain times, but, you made the Amazon comment, and I balanced that with convenience and product availability, and, you know, the expectation that I want this and I want it now, and so I think that there’s this interesting dynamic of the tried and true, versus these up and comers, that perhaps are more flexible, that can be more nimble, and can provide some of that value, and reach consumer expectations in a more quick way.

Tessa Burg: Yeah, and I think you’re right, you know, our expectations as consumers has changed and we’ve always known that, you know, experience and personalization is really important to brand loyalty, and Amazon was given the opportunity in the pandemic to sort of showcase, how they use tech to do that really, really well, they, you know.

Kevin Krekeler: Yeah, I mean, absolutely, you know, when I think of, when I think of brands that are doing, or at least considering, you know, customer loyalty and how to cultivate that, Amazon is front and center for so many reasons, convenience, right? There’s so many sellers, there’s availability of product, delivery, right? If you want it now, you can basically get it now. Amazon has been so good at removing the friction from an online purchase, right? From start to finish, whether that’s something like a single button purchased, or to honestly being able to return something, just about anywhere, like I’m pretty sure, that if I threw an Amazon package out the window, you know, on the highway this morning, as a return, it would’ve gotten back to where it needed to, I mean, they really make it that seamless, and then, right? Those are all very functional things, but then I think they’re also creating this emotional attachment, when you look at things like, okay, now I’ve become a member and I get all these value ads, right? That makes me feel special. I get this subscription to Amazon music, to prime video, you know, I get some extra perks at Whole Foods, whatever it may be. So, functionally they’re addressing these priorities or the things that people care about when they’re considering their loyalty to a brand, and they just continue to deliver over it.

Tessa Burg: I agree, I definitely take advantage of the perks at Whole Foods and have enjoyed saving money at a place that was historically expensive. Outside though of CPG and retail, are we seeing other industries impacted by change in consumer expectation or change in even our requirements as you know, inflation is a reality.

Kevin Krekeler: Sure. You know, in my experience, I think that the level of impact for a business, or a consumer’s perception on that particular brand as a result of these circumstances, certainly varies at scale, depending on the industry or the category that they’re in, but one thing that I do believe is that, whether you are a small business, a big brand, consumer-oriented, business to business oriented, that, you know, when you look at the factors that create loyalty, you know, those factors are all pretty similar, and you know, for me, I think for the, you know, there’s so many different variables for the sake of this conversation, I think there’s a few that come to mind for me, one is affordability, right? That’s probably a factor that stands the test of time, I think there is another factor in terms of product and service quality, you know, right? If you deliver on customer expectations, you put a high-quality product in there, you have a service that makes them feel special and exceeds their expectations, that certainly will help drive loyalty. And then, you know, I think the third one just for, again, for this conversation, I’m going to put delivery up there, and while I think that delivery has increasingly become more important over time in this digital age, it certainly has been accelerated over the last couple of years, right? I mentioned people’s expectation for receiving things here, and now, it’s this on-demand culture, you know, I used to think my kids were impatient just because they are little kids, and I was like, no, this is the world that they grow up in now, like they just expect it, right? My four-year-old, if I think about how young she was when the pandemic started, all she knows are all these Amazon packages showing up, showing up to the house, right? Mom and dad need it and here it is. So, I think that those are some factors that regardless of the industry that you’re in, will always impact someone’s loyalty to the brand, and I think also, are probably the same list of factors as to why someone may abandon the brand.

Tessa Burg: Yeah, I think you bring up an interesting point with delivery and how we’ve really become impatient, and one company that changed delivery entirely was Netflix, and now, you know, they had a boon in the pandemic, they lost a ton of subscribers this year and are putting measures in place to balance the business and regain customers. What are your thoughts on how they’re going about that, and really what’s most important for us as marketers, as we are looking to balance our business needs with continuing to meet these ever-increasing expectations on delivering experience for our customers?

Kevin Krekeler: Yeah, absolutely. You know, I love Netflix, it’s funny because now we probably have, you know, colleagues that don’t even know Netflix from the time where, you know, is a mail order DVD.

Tessa Burg: Yeah.

Kevin Krekeler: Service, but they’ve certainly come a long way, and in many cases they took off like a rocket ship, and so, when businesses do that, and then they come across some challenges when they get to a certain scale, it’s certainly understandable, some of the business decisions that they’re making are tough, but from what I’ve seen, have been very well informed, right? If you talk about, in the context of this discussion of brand loyalty, what can you do? It’s talking to your customers, right? So, talking to your subscribers and understanding what’s important to them, and to be honest, I think that, the general Netflix user, right? Is, I want to give them some credit, but to a degree naive about the business challenges that they’re having, right. They’re not really going to consider those types of things, until Netflix fails to deliver on their expectation or fails to deliver on some priority of theirs, right? So, if, you know, right, wrong or indifferent, if sharing your Netflix password is important to you, as soon as they snatch that away, that’s gonna alter your perception and perhaps your loyalty to the brand, at the same time, you may become frustrated that there’s these tiers of membership now, but they’re a business, right? And so they need to continue to look for ways to grow, and so if you are Netflix and you can open more doors to new subscribers, because you have an ad based model, to me that’s fine, and also by the way, it’s a model that consumers expect these days, right? People subscribe to Hulu at different levels, and they acknowledge that if they don’t invest as much per month, they’re gonna have ads, and that’s okay. And so I think that, as Netflix goes through these challenging times, they’ve also made really good business decisions that if you look at, kind of, you know, the general market feedback on it has been relatively positive, and I think that if they continue to talk to their customers, and really address what they care about most, they’ll be okay. And let’s also just recognize the high quality of original programming that they had, I mean, the whole streaming conversation is a really interesting one, but I think that original content is going to become a big X-factor on who wins, and who doesn’t in this streaming market, because there’s just so many different options that are popping up for people to consider, and I think licensing and things like that, I think people are gonna become more, they’re going to hold those closer to their vest, and so, original content is gonna be one of the biggest differentiators, but again, that’s probably another discussion for another day.

Tessa Burg: No, yeah, I’m super excited about the new “Gray Man” movie coming out, and I agree, and you hit on something that’s so important that I think it’s overlooked a lot, which is listening to your customers, and the reality is people’s priorities and why they stick with brands have changed, and I am not sure brands are doing enough to really keep a pulse, on how those priorities have changed and how important those factors now are to them as they’re weighing affordability, versus content versus quality, what are some things brands can do to get closer to their customers, and for them, since they are, you know, getting pinched and needing to save on margin in an affordable way, and still get the data they need to truly deliver in an authentic manner, that’s in line with customer expectation.

Kevin Krekeler: Yeah, I mean, I think that when you’re talking about, say large brands, right? They’re already capturing the data, I think it’s in the execution and in delivery, right? Leveraging that data is where some may not perform as high as others, and that’s where challenges can come into place, to me throughout my career, I’ve always been massively committed to the customer voice, right? I’ve always followed that adage, of what you have to say is interesting, what your customers have to say is everything, and so you need to regularly be soliciting their feedback, you have to, to me, position yourself, message yourself, and really align your products and services to be able to evolve to their expectations and to their priorities over time. Outside of that, the other thing that I would say, is something that’s been talked to a lot about in our industry, is just authenticity, right? Consumers are smart these days, right? And so they know when something’s just a marketing message versus whether or not you really deliver on it.

Tessa Burg: Yeah, that’s interesting you say that, because we see that a lot, you know, people do have the data, but are you truly listening to it? And are you making decisions based on the data, I’ve been in more than one meeting, where basically you have numbers of people are like, why? I just don’t believe that. You know, we mix this qualitative and quantitative data together and it gives us a clear story, it really is up to us as marketers and as business leaders to say, what am I going to do with this information?

Kevin Krekeler: Absolutely. There was a quote from a CEO that I saw in my feed on LinkedIn recently, and he said, not everything that is measurable is important, not everything that is important is measurable, And I think that’s.

Tessa Burg: I love that.

Kevin Krekeler: Yeah, absolutely, and I think that’s also a really important sentiment when you have marketing leaders, having to report back on the value of their programs to non-marketing leadership, right? That oftentimes there can be this disconnect on the specific objectives of what a particular channel or program is supposed to accomplish, because at the end of the day, right? We’re all adhered to or accountable for more sales, but the path to get there has different goals, that ladder up to them.

Tessa Burg: Yeah. Have you seen any marketers or brands doing this really well, like doing a good job at knowing what to prioritize, to really bring customers back or keep customers?

Kevin Krekeler: Sure, yeah, I mean, obviously we talked about Amazon, I think that’s an expected one, if you talked to other people like me, I’m sure if you looked at research on brand loyalty Amazon is going to be at the top, another one that’s probably widely recognized would be Apple, right? For reasons that include, they have this steady stream of product innovation that continues to get people excited, I think that’s where you get the emotional aspects of brand loyalty, the overall customer experience and in their service level that they’ve created over time, I mean, you know, when is the last time you walked by an empty Apple store? They take customer experience to the next level, and then I also think that just with a brand like Apple, there’s the element of cache, of being an Apple user and that’s self-expressive, like what it says about me for using Apple, and I do think that for all the product innovation and customer experiences that we’ve talked about, just the cool factor in a consumer wanting to associate themselves with that creates a sense of loyalty. And then I think the last one that I’d like to mention, just because it’s a personal one to me, a personal favorite of mine, is the brand Patagonia, right?

Tessa Burg: Oh, yeah.

Kevin Krekeler: The fact that they have a passion for the outdoors does not make them unique, but how committed they are to the environment, I mean, they’re in apparel, right? One of the biggest producers of waste, if not the largest producer of waste of any industry, that they will make decisions that benefit the environment, even if it’s the expense of a business opportunity in front of them.

Tessa Burg: I think that’s really powerful, and you hit on those things where businesses are showing that they’re in it, that they’re in this environment, they’re in the shared experience with their buyers, and in the Cleveland office we focus a lot on B2B, and I won’t say any names because I did not ask for permission, but you triggered some thoughts of, you know, a couple of our business to business clients have built communities like lock communities, where they are giving their sellers, their distributors, exclusive content, more exclusive deals, more support to sell their product, and under this banner of really focusing on what their need is in real-time, so it translates, you know, us as humans have these higher expectations, but we also need to know, that the businesses that we’re doing business with or buying from, are sort of in their shared experience with us.

Kevin Krekeler: You’re so right and actually I’m glad, because I do feel like a lot of this conversation has been very, you know, kind of big brand consumer-oriented, but I’m glad you brought up the business-to-business piece because I would agree, and again earlier on I made that statement, right? That okay, if things like affordability and product and service quality and delivery, are some of the factors that make people loyal to a brand, the things that you talked about I think are in play with business to business that, it’s not just about having the lowest price product, right? But being able to have these other things that surround your experience with that, you know, with that B2B brand, whether it’s some high growth middle market company or a large enterprise, that creates a level of attachment, I can think of, you know, plenty of B2B clients here out of the Dallas office and that they have insane loyalty with these audiences, and therefore reasons that extend beyond the very functional, you know, procurement based.

Tessa Burg: Yeah, no, I agree. So, we’re getting to the end, so, I feel like we’ve hit on some great takeaways that people can do today. One, look at the data you already have from your customers and be honest with yourself on where are your buyers and customers prioritizing these more functional factors of brand loyalty right now, and what can we do as marketers to respond to that. I think you hit on another really important aspect, Kevin of, you know, what is brand loyalty? It’s transactional and emotional, and the more we move people into emotional, the more likely we are to keep them and to weather the storm of any ups and downs together. So anything else that you think is important for marketers to take away from this conversation on brand and customer loyalty?

Kevin Krekeler: Sure, I think, I really, and I like your summary and appreciate it, you know, I’ve always thought about decision making as a balance of the head and the heart, and that’s not limited to consumer environments either, right? Anyone who doesn’t think that emotion is part of business decision is crazy, because there’s plenty of emotion that goes into those as well. I think that, things that brands should be aware of, or things for them to look out for. One, I’m gonna say, and again, I’m not trying to beat a dead horse here, but you know, things like sustainability, right? We probably all expected that to come up in some way, shape or form, obviously I already referenced it through an example with Patagonia, but I think consumers want, maybe more importantly, expect brands to put a stake in the ground on where they stand with sustainability, and that’s not just in terms of wedging in some marketing messaging on your website, throwing up a landing page that says, you’re doing this or that, but actively showing, right? The impact, right? The outcome of your commitment to sustainability, I think that’s something that branch should continue to be on the lookout for, the other thing, in terms of just kind of brand loyalty as a whole, and maybe I’m coming up with this based on my own shopping behaviors, and my own kind of experience with this brand these days, is kind of the small company versus the big company, small brands, big brands, and the reason why I say that is, that you have always had, right? This, I think this affinity or desire by consumers to support smaller businesses, right? And that’s not to say they’re not shopping at the big ones, you know, at all, or they’re only going to shop at small exclusively, but I think that there are so many smaller companies that are creating disruption in a lot of different categories that have compelling brand stories, in many cases are quite affordable and because they’re smaller can be a bit more nimble than some of your larger brands. And again, maybe this is just a survey of one, right? In my Instagram shopping experiences, but you know, through social, I’ve been introduced to so many new brands that fit my personality, that fit my, what I deem to be my consumer profile, and I really want to see them, I really want to see them, you know, succeed, and again, I think there’s enough piece of the pie, right? For your big brands and for these smaller brands to work in unison, but I do think that if you’re a big brand, you’re kind of looking at what those smaller up and comers are doing and seeing how you may modify some of the things that they’re doing well, into the things that obviously have already made you so successful and made you kind of this go-to brand for so many years.

Tessa Burg: Yeah, and you hit on something I think is really important for big brands, both the B2B and B2C side to monitor, look out for, start taking action, which is as smaller companies are able to deliver those outcomes, are able to show authentically, hey, I am responding to sustainability, hey, this is what I’m doing because I know climate change is important, or whatever is important, ’cause that’s part of the brand, right? Is our shared value with our customers, but I agree there are smaller companies who show those outcomes better, and maybe the larger companies either need to start acting or just do a better job, on showing the outcomes of that value alignment with their base, whatever that value alignment is.

Kevin Krekeler: Yeah, and you’re right, it comes back to that authenticity, right? Is that like, take all those factors and throw them aside, right? At the end of the day, if you’re authentic with your customer and you are delivering on the things they care about most, it seems really simple, right? Almost too simple, because the execution of that idea is difficult, but reason seems to think, that if you address the things that your customers care about most, you’re giving yourself the best opportunity to win.

Tessa Burg: Yeah. Well, and Kevin that’s what makes our job fun because we get to do the execution piece of it.

Kevin Krekeler: Yes, absolutely, absolutely.

Tessa Burg: So we’re out of time, but thank you so much for being our guest today, this is an awesome conversation. If people want to get in touch with you, where can they find you?

Kevin Krekeler: So they can find me on LinkedIn or they can also find my email address on modop.com and they can reach out to me directly that way, love to chat, one of my favorite things about my job is that I get to talk to so many people across so many different roles and so many different industries every day, and not to be corny, but for those listeners out there, I hope to be able to speak with you too.

Tessa Burg: Yeah. So, before we got on, we talked about your, the spelling of your last name, so you can find Kevin on LinkedIn, it’s Kevin Krekeler. K-R-E-K-E-L-E-R, or visit modop.com, M-O-D-O-P.com.

Kevin Krekeler: Yeah, hit that contact page and you’ll see me on there.

Tessa Burg: If you’re not on LinkedIn and watching this video then.

Kevin Krekeler: Yes, yes.

Tessa Burg:  So thank you, and we, oh, we are episodes now, if you want to hear more episodes from Lead Generation visit the showcase page Lead Generation podcast on LinkedIn, or you can still go to tenlo.com, that migration project over to Mod Op, we’ll be happening soon, but tenlo.com, click on podcast for all the episodes. Thanks, Kevin, for joining us, and I will be talking to you again soon.

Kevin Krekeler: Thank you so much, take care.

Kevin Krekeler

Director of Client Engagement at Mod Op

In his role, Kevin connects the agency with new clients. Plus, develops strategies to help existing clients connect with their customers.

With his broad experience in both B2B and consumer markets, Kevin understands the business challenges that clients face. He also provides the expertise to help them achieve the results they expect.

How To Build Brand Loyalty & Affinity

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