The power of brand loyalty: How subscription brands can benefit from strong branding

Have you ever wondered why certain brands have a huge following, with customers willing to pay premium prices just to use or own their products? The answer lies in the power of brand loyalty. In today's cluttered market, where new businesses are still emerging regularly, building and maintaining customer loyalty is vital for any business's survival. Subscription-based offerings, like Netflix, Spotify or even Lynk & Co's subscription car offering — can reap incredible benefits from solid branding strategies that capture consumers' hearts and minds while keeping them loyal over time. Having now experienced 2 subscription brands in my career (Lovevery and Lynk & Co), I'll touch on the world of brand loyalty as I see it, and how subscription brands can harness their own power to enhance customer retention rates, increase revenue streams and establish sustainable growth.

What is Brand Loyalty?

Brand loyalty is the tendency for customers to continue buying a certain product or using a certain service, despite other options being available. This loyalty can be due to many factors, including the quality of the product or service, convenience, habit, and emotional attachment.

For subscription brands, strong brand loyalty is necessary and extremely beneficial. Not only does it mean that customers are more likely to stick around (and therefore pay their monthly fees), but it also makes them more likely to recommend the brand to others. This word-of-mouth marketing can be invaluable for a subscription brand looking to grow its customer base.

There are a few key things that all subscription brands should keep in mind if they want to foster strong brand loyalty:

1. Make sure you're offering a high-quality product or service that meets (and preferably exceeds) customers' expectations.

2. Build an emotional connection with your customers so they feel positively towards your brand. This could be done through personalisation, education, goodwill, or customer service.

3. Offer flexibility: Customers appreciate flexibility in their subscription plans. At Lynk & Co, we allow users to get out of their subscription every month. Offer options for customers to pause, cancel, or modify their subscription as per their requirements. This will help in retaining customers who may have changed their preferences or financial or life-changing situations.

4. Keep your pricing competitive: Customers subscribe to your brand because they perceive it to be a good value proposition. Keep your pricing competitive and offer discounts or promotions to incentivize new customers to sign up and existing customers to continue their subscriptions.

5. Provide exclusive content or perks: To keep customers engaged and interested in your brand, offer exclusive content or perks that are only available to subscribers. Airlines, for instance, have been doing this for years with their frequent-flyer programmes, understanding that consumers usually have a choice. This could be anything from early access to new products to exclusive discounts or events.

6. Encourage referrals: Word of mouth is a powerful marketing tool for subscription brands. Encourage your existing subscribers to refer their friends and family to your brand. Offer incentives such as discounts or free products to both the referrer and the new subscriber to incentivize referrals. Referrals typically have a higher conversion rate than other marketing channels, as they come from a trusted source, such as a friend or family member. Sometimes also from a trusted influencer.

The Benefits of Brand Building for Subscription Brands

There are many benefits of brand building for subscription brands. By investing in branding, subscription brands can create a strong and unique identity that will help them stand out from the competition. A strong brand will also build customer loyalty, making it more likely that customers will stick with the brand over time. In addition, a strong brand can help subscription brands increase their prices without losing customers, as customers who are loyal to a brand are often willing to pay more for its products or services.

Strategies to Leverage Brand Loyalty

Many subscription brands are able to leverage customer loyalty by creating strong brand equity. Building a well-recognised brand can help increase customer acquisition and retention rates, while also providing a valuable source of revenue.

There are several strategies that subscription brands can use to take advantage of customer loyalty:

1. Create a seamless customer experience: A key part of building a successful brand is ensuring that customers have a positive and consistent experience with your product or service. This starts with making it easy for customers to sign up and continue their subscription, and extends to providing excellent customer service throughout the duration of their relationship with your brand.

2. Offer value-added services: Another way to keep customers coming back is to offer them additional services or perks that they can’t get from other brands. This could include exclusive access to content, early access to new products, or personalisation options.

3. Foster a sense of community: Social media and online forums provide an opportunity for brands to connect with their customers on a deeper level. By engaging with customers online, you can create a sense of community and belonging around your brand. This can help increase customer loyalty and the likelihood of recommending,

Examples of Brands that Succeeded with Brand Loyalty

There are plenty of examples of brands that have succeeded by fostering brand loyalty among their customers in Europe/The UK. Here are just a few:

1. HelloFresh: A meal-kit delivery service that provides subscribers with pre-portioned ingredients and recipes to cook healthy and tasty meals at home.

2. Glossybox: Another popular beauty subscription box in Europe, Glossybox delivers 5 luxury beauty products to its subscribers every month..

3. Lynk & Co: A Swedish mobility company that was created to provide simple, hassle-free, sustainable mobility solutions. They make "damn good" cars and offer a new way of using them. Their customers can access a car on a flexible, subscription basis and share with friends, family, and the Lynk & Co community. Their physical spaces (see an example below), or Clubs, are where people get to know the brand — have a coffee, hangout, or catch the latest event — and of course, experience and test drive. The combination of digital and physical retail experience is aimed at creating an excellent customer experience.

4. Spotify: Ever since it was first launched, Spotify has experienced exponential growth in both active users and premium members. According to Statista, Spotify has today 195 million premium users — a 930% more than it did in 2015. Spotify’s first big success lies in the extensive user account customisation that has been made possible since the very first day. Spotify encourages users to create their own playlists, essentially building an entire library of music on their accounts.

5. Lovevery: Offering stage-based play essentials: designed by experts, built for babies and toddlers up to age 4, delivered to the door of parents every 2-3 months.

These are just a few examples of brands that have succeeded thanks to strong branding and customer loyalty. New subscription businesses can learn a lot from these companies, and use their example to build up their own base of loyal customers.

What's the takeaway?

Strong brand loyalty can help subscription brands establish a unique identity and engender trust. By creating a memorable customer experience and providing value-added services, businesses can tap into the power of loyal customers who will love to spread the word about their favourite products or services. Constantly communicating with your customers and engaging in meaningful, engaging or educational conversations is an essential step toward building a successful long-term relationship with them.