More than any event or situation, the COVID-19 pandemic forced millions of customers to throw brand and customer loyalty out the window. As the pandemic swept across the world, global supply chain disruptions, business closures and panic buying changed buying behavior. Unsurprisingly, Americans changed their shopping habits, switching to online, curbside pickup, meal delivery and other contactless methods — trends that are continuing even as the economy slowly reopens and recovers.

The more difficult challenge for marketers is the 30% to 40% of Americans who continue to switch brands, particularly younger generations, according to a recent McKinsey survey. Some abandoned their brands because of product availability issues or confusing ordering processes with apps and websites, but others switched to brands that better matched their values. So while it may be tempting to chase customer loyalty, you may generate higher returns on investment by securing brand loyalty. In my experience, one of the most effective ways to build brand loyalty is through experiential marketing.

Brand loyalty versus customer loyalty — there is a difference

Customer loyalty and brand loyalty are essential to customer retention. However, they differ in significant ways.

Customer loyalty: Customer loyalty relates to customers who transact with a business regularly and frequently. Pricing is the primary motivating factor in customer loyalty — customers buy from you because they feel satisfied that your products or services fit their needs and budgets. While they tend to buy more products or services, the profit margins are typically lower. Additionally, retention rates tend to be low because customers will quickly shift to a competitor who offers a better deal.

Brand loyalty: Brand loyalty is not driven by price. Brand loyalty describes devoted consumers who repeatedly buy because they perceive that your brand offers a higher quality experience, product or service than all other brands in the market. As a result, they are often willing to pay more, generating higher profit margins despite sometimes buying fewer products. These valuable customers are also more likely to try your brand’s other products.

Purpose-driven brand loyalty: Consumers are also pitching their loyalty behind brands that support social, environmental and health causes that matter to them. These consumers are also willing to pay more, knowing their purchase is supporting a cause.

Regardless of the motivation, brand loyal customers remain loyal because they trust your brand’s reputation, leading to high retention rates. Lastly, brand loyalty is much easier to maintain once achieved than customer loyalty.

How experiential marketing builds brand loyalty

Experiential marketing, sometimes called engagement marketing, aims to create surprisingly delightful opportunities for your target audience to engage with your brand and make emotional connections. Examples include unique events, pop-ups, tours, product sampling, public relations stunts, brand activations/sponsorships, hospitality lounges and product showcases. Experiential marketing campaigns allow consumers to interact directly with your brand in an authentic, two-way conversation versus the traditional one-way deluge of marketing noise — noise that consumers can tune out more easily than ever before.

When your target audience can touch, see, smell, hear, taste or experience your product or service in a meaningful, positive way, they will remember it. The primary goal is to create experiences consumers will remember and share with others in photos, tweets and conversations. These loyal consumers become unofficial brand ambassadors or advocates, which is the holy grail of any marketing campaign. Today’s consumers are far more influenced by their peers and social media influencers than by traditional advertising.

Experiential marketing isn’t only for product-based businesses

When we think of experiential marketing, we think of people milling around a tent or booth, touching, hearing, tasting and participating in a sensory experience with a brand’s product. However, experiential marketing campaigns can be very effective for service-based and media businesses as well.

Hollywood movie studios and streaming services are masters at creating experiential events to promote the launch of a new movie or series. A few notable examples include Hulu’s The Handmaid’s Tale campaign at the 2017 South by Southwest Festival in Austin, where a group of actors dressed in the main character’s iconic red and white clothing silently strolled around. This simple, relatively low-cost effort created significant buzz and plenty of free publicity.

In another example, North Carolina-based Ally Bank hosted a “You’re in Charge” campaign to celebrate National Online Bank Day that involved a brand-themed drone delivering free phone chargers to shoppers in a busy mall. Another effective way a service-oriented brand can engage with consumers is by hosting VIP hospitality lounges at bustling events where attendees can take a break, enjoy refreshments, get chair massages or have fun virtual reality experiences.

The takeaway – cost and time factors to consider

Brands are continually challenged to cut through the noise and differentiate themselves from competitors — and experiential marketing creates those opportunities by attracting new customers and converting them to loyal ones. Experiential marketing focuses more on providing a personalized, positive experience than on selling products or services. In addition, campaigns don’t have to be wide-scale, expensive efforts, so even smaller brands can reap the benefits. And lastly, the returns on investments can take longer to materialize but are often much higher than with other marketing strategies.

How do you know you’re delivering the right message to the right people at the right time? You can create a fabulous message, but if you’re delivering it to consumers who are NOT likely to engage with your brand, you’re wasting valuable time and resources. Knowing how to identify your target audience is crucial to the success of your business. You may have more than one target audience, so it’s also essential to create messages that resonate with each of them. Let’s delve into how to identify your target audience.

What is a Target Audience?

Your target audience is a group of consumers who are most likely to want your product or service. Specific demographics and behaviors such as age, gender, socioeconomic status, location, cultural preferences, profession, interests, and more are all factors that make up your target audience.

Your target audience may have segments or niches as well. For example, a real estate agency might want to attract first-time buyers with smaller budgets as well as wealthier clients seeking a luxury vacation home. Likewise, a skincare company that makes products for men and women would want to market to them differently — and target niches within each gender, such as teens fighting acne or older women worried about wrinkles.

Roles Within Your Target Market

Your target audience also has characteristics beyond demographics and interests. For the most part, your target audience falls into one of two categories:

The Decision Maker: This consumer makes the purchase, even if they are not the person using the product or service. Using our skincare company example, men may use an aftershave lotion, but their wives or girlfriends are the ones choosing which product to buy.

The Influencer: These people may lack the ability to buy, but they wield a heavy influence over the buying decision. Gen Z, consumers born roughly between 1997 and 2012, have immense influence over how their parents and peers spend money, even if they’re not old enough to buy. Spouses/significant others, colleagues, friends, and family members typically play influencer roles.

The takeaway here is that you’ll want to craft messages that speak to both consumers.

Determine Your Ideal Customer

You’ll want to identify who your ideal customer is and their top concerns and desires. It can be helpful to create an avatar or a “perfect customer” for each target audience — their age, gender, marital/relationship status, location, income, and interests.

In our real estate example above, the first-time homebuyer might look something like this:

• Age: late 20s to early 30s
• Relationship status: recently engaged or married
• Desired location: suburb not too far from their workplace
• Income: stable and sufficient to afford a 10 to 15% down payment, monthly mortgage payments, and related expenses
• Interests: wants to start a family within a few years, so needs a home in a neighborhood suitable for children (parks, schools, recreation)
• Plans for the home: only residence / live in it for several years

Alternatively, the second vacation homebuyer might have these characteristics:

• Age: 50s to early 60s, retired or retiring soon
• Relationship status: married with adult children, possibly grandchildren
• Desired location: Upscale oceanfront resort community
• Income: Very high and stable, can easily afford a sizeable down payment and monthly mortgage payments
• Interests: golf, boating, tennis, country club membership
• Plans for the home: use it several times throughout the year for vacations and family gatherings / an investment opportunity so likely to sell when the time is right

The ideal messaging for attracting budget-constrained, first-time buyers would demonstrate how the agency can help them find an affordable home in a family-friendly neighborhood. In contrast, the best messaging to attract vacation homebuyers would showcase the agency’s expertise in finding luxury homes in desirable upscale communities.

The key takeaway here is that once you know specific details about who you want to attract to your brand, you’ll be better able to craft messages that appeal to them.

Determine Your Target Audience’s Pain Points

Another vital component to identifying your ideal customer is understanding their concerns and the problems they are trying to solve, known as pain points. Pain points can also be benefits or solutions that improve their lives in some way — make them feel healthier, wealthier or more attractive; save them time or money; reduce frustration or stress, etc.

Using our real estate agency example, pain points for the first-time buyer might be:

• I’m worried I’ll pick the wrong neighborhood.
• What if I can’t find any affordable homes I like?
• What if I find expensive problems in the house after the sale is final?
• Can I trust this agency to be fair and have my best interests in mind?

The vacation homebuyer’s pain points might be very different:

• I’m worried the home will lose value instead of appreciating.
• What about vandalism or theft while I’m not there — does the community provide adequate security?
• How likely is the home to be damaged or destroyed in a hurricane?
• Does this agency have expertise in identifying homes with a high likelihood of generating an appealing return on investment?

The key takeaway is that once you understand how your products or services can solve your target consumers’ pain points, you’ll have a much better chance of engaging with them.

Need help determining who your target audience is? We can help! Contact us today.