The average person swipes their phone screen a distance equivalent to 78 miles each year. That’s three marathons – all done by thumb. It’s also the reason why athletic footwear and apparel maker Saucony came up with its Marathumb Challenge. This loyalty program rewards customers with discounts or gifts for running further than they scroll.
While it’s a clever reward scheme that links a brand with the aspirations and values of its customers, the strategy behind it – namely, boosting positive feelings and experiences to encourage repeat behaviour – is one that businesses have been using for a long time.
It all comes down to dopamine – the chemical that regulates feelings of reward and anticipation. Dopamine can also foster strong connections between stimuli and pleasurable outcomes, and brands that trigger these pleasurable sensations can often find their customer retention also improves at the same time.
This may sound more scientific than one might expect from a typical customer strategy, but being aware of the neurobiological principles that drive repeat purchases can help transform a brand’s understanding of – and revolutionise its approach to – loyalty.
Nearly nine in ten (87%) repeat purchasers say their preferred brands make them feel good. That’s according to a new report by Intuit Mailchimp and consumer insights agency Canvas8. The Science of Loyalty is a global study that includes input from experts in neuroscience, behavioural science, psychology and anthropology, as well as responses from 4,000 consumers across the UK, US, Canada and Australia. It aims to unlock the secrets of buying behaviours to help businesses rethink their approaches to customer retention.
“A lot of companies see loyalty as just a marketing strategy, but actually it’s imperative for strategic growth,” says Kara Melchers, cultural analyst and head of viewpoint at Canvas8.
“The myth is that acquisition is the best or quickest way to grow a business. But looking for new customers is getting harder and more expensive, which makes the marketing landscape more complex,” Melchers says. “So keeping your existing customers becomes more important and a more integral route to growth.”
The four types of loyal customers
Not all repeat purchases are the same. There are many reasons why people buy the same product from the same brand, week in, week out. Figuring out why can help businesses redefine what loyalty means to them and target customers more efficiently.
The Science of Loyalty outlines four groups of repeat buyers on a commitment spectrum: inert, habitual, dedicated and fandom.
Inert customers (who account for 25% of all repeat purchasers) are those who buy because switching brands is too difficult. Habitual customers (23%) opt for a brand based on routine and consistency rather than any strong preference. Dedicated customers (40%) have a strong preference for the brand. Fandom customers (13%) are the true brand advocates – they feel a real sense of connection to the brand and its community.
The different customer segments show that re-purchasing behaviour is not merely a manifestation of love – as many marketers would like to think. Instead, it’s the result of subconscious cues which steer consumers toward familiar choices. What brands may interpret as devotion could, therefore, be motivated by something much more neutral.
“What marketers hear when they get advice on loyalty is always about discounts. It’s always about how cheap you can make your product or how you run a promotion,” says Jillian Ryan, senior manager of content marketing strategy at Intuit Mailchimp. “While there could be value to that, we wanted to really understand the fundamental drivers of human loyal behaviour.”
For example, The Science of Loyalty revealed that 26% of repeat purchases happen simply because they’re part of a customer’s routine. This rises to 37% in the food and beverage sector. Meanwhile, 22% of repeat purchases occur because a brand or product was readily available, which accounts for 31% of transactions in the books and literature category.
The research shows how important it is to treat each type of loyalty differently. While loyal behaviour – namely the act of repurchasing repeatedly over time – may appear the same on the surface across your repeat customer base, each individual could have a different attitude towards your brand, product or service. Targeting those various levels of commitment thus becomes vital.
Ryan continues: “Oftentimes, it’s easy to get lured into the need to acquire new customers, but there needs to be a balance in terms of looking at your existing audience. You need to look at who’s already spending with you and understand why and how you could potentially get more from that relationship.”
Targeting inert and habitual loyalty
Loyalty starts with behaviour change, but driving that change will depend on the type of buyer you’re targeting. For example, inert and habitual buyers crave convenience and ease of purchasing, while dedicated customers and fans want to feel a sense of purpose and belonging.
For inert customers, brands should focus on increasing the ability to purchase. After all, this group craves consistency and familiarity when they shop. Mailchimp’s research shows that 97% of repeat purchasers said their preferred brand makes it quick and easy to purchase. Our brains prioritise minimising discomfort over the pursuit of pleasure.
“If they’re not emotionally tied into your brand, the way you keep them coming back is to make the brand experience really easy,” Melchers says. “It’s not about discounts. It’s not about elaborate loyalty programmes or creative strategies. It’s just about making your path to purchase easy.”
For example, brands could optimise their checkout process or rethink their email marketing. They could send well-timed automated messages to previous purchasers who are likely running low on a product or offer the option to subscribe for regular replacements.
Memory also plays a key part in targeting these more unconscious brand preferences. People can have a cognitive bias towards things they know and are familiar with. And even if consumers haven’t had a direct interaction with a certain brand before, semantic memory – through regular and consistent exposure – can sometimes fill in the gaps. Customers may then start to feel more positively about the brand the more they encounter it.
“It’s called the ‘mere-exposure effect’ – the idea that you’re more likely to buy from a brand that you’re familiar with than one you’re not,” Melchers says.
Rewarding dedication and fostering fandom
Brands often wrongly assume that fandom is the only type of loyalty worth chasing. “They incorrectly think that if you don’t have superfans then your strategies aren’t working,” Ryan says. “However, you might not need to send discount codes to fans, because they’re going to show up and buy your product because they love it and it speaks to them. They feel that emotional connection. Whereas other customers might need that promo code because they’re buying it out of convenience.”
Creating a more dedicated customer group or fan base requires a whole different strategy – one focused on increasing the motivation of consumers to buy your product or service.
Brands wanting to target these groups should engage customers emotionally, align with their interests and values, or make them feel special – such as acknowledging their most loyal buyers with gifts, exclusive access or event invites. Some 59% of dedicated customers regularly buy from brands that give them treats and make them feel pampered, compared with 52% of habitual and inert purchasers.
Creating channels for loyal purchasers to share their feedback can also work, deepening the customer’s sense of engagement with the brand. Requesting opinions via email surveys, or polls and quizzes on social media, can foster that two-way communication that’s so valuable in creating loyalty.
Meanwhile, aligning the brand with a cultural niche or social cause is a great way to build an emotional connection with customers. Some brands do this by sponsoring events and venues or funding community initiatives, making space for customers to engage in their shared interests. The Science of Loyalty shows that 74% of fans say they share values with their preferred brand, compared with 68% of total consumers.
Redefining what loyalty means
Repeat purchases (or lack thereof) can make or break a business. But can all brands realistically inspire fandom and undying devotion from their entire customer base? Conversely, can they expect all buying decisions to be so automatic and unconscious that customers will continue to buy, no matter what?
Different businesses have to react to all sorts of buying behaviours. For some brands, it may be a lot easier – and cheaper – to pursue habitual loyalty than to go down the costly road of turning all customers into hardcore fans. Marketers’ individual approaches will depend on how the four categories of loyal customers align with business goals.
Ryan recommends looking at the behavioural data of customers, working out which categories they fall into, and personalising an approach accordingly. “It’s a real window into how you can encourage certain behaviours among your customer base with prompts and nudges that are rooted in science,” she says.
Marketing and sales professionals will know that loyalty of any kind is exceptionally hard to achieve. But understanding what makes customers tick may just keep them coming back.
All statistics from a Canvas8 conducted panel-sample online survey on behalf of Intuit Mailchimp February 17–27, 2024 consisting of 4,000 respondents (1000 from each of the US, UK, Australia, Canada ages 18 to 65). The margin of error is +/- 5.5 percent, as reported at a 95 percent confidence level.
Disclaimer: The views, information and opinions expressed in this article are those of the people interviewed and do not necessarily represent or reflect the views of Intuit, Mailchimp or any of its cornerstone brands or employees. The primary purpose of this article is to educate and inform. This article does not constitute financial or other professional advice or services.
The average person swipes their phone screen a distance equivalent to 78 miles each year. That’s three marathons – all done by thumb. It’s also the reason why athletic footwear and apparel maker Saucony came up with its Marathumb Challenge. This loyalty program rewards customers with discounts or gifts for running further than they scroll.
While it’s a clever reward scheme that links a brand with the aspirations and values of its customers, the strategy behind it – namely, boosting positive feelings and experiences to encourage repeat behaviour – is one that businesses have been using for a long time.
It all comes down to dopamine – the chemical that regulates feelings of reward and anticipation. Dopamine can also foster strong connections between stimuli and pleasurable outcomes, and brands that trigger these pleasurable sensations can often find their customer retention also improves at the same time.
