A loyal customer not only continues buying the same product or service, but has the potential to develop trust and expand into purchasing other products under your brand. Loyal customers are also more likely to recommend brands to their friends and family. Unfortunately, today’s consumers are much more cautious than they have been in previous years. Recent consumer data reminds us that people's shopping habits are changing. Consumers prioritize values like hard work, thriftiness, fairness, and transparency (Gerzema, J., D’Anthonio, M., 2010). Contemporary consumers expect more of brands and businesses. It takes extra effort to win their trust and loyalty, especially for manufacturers, who often have less brand visibility. Starting to see why it's so important to develop customer loyalty strategies?
The Manufacturer Problem
The problem manufacturers often face is a lack of contact with the end-consumer. A consumer or contractor who praises the quality and durability of products like flooring or roof shingles, for example, may not even know which manufacturer makes the product, if they purchased from a dealer or distributor. Consumers’ lack of familiarity with brands makes it harder for them to promote those brands. Connection with consumers is often lost in the channel sales chain.
Rather than waiting around for loyalty to take hold among the consumer base, you can take active steps to create loyalty, even as a manufacturer. In this article, we will discuss two ways for manufacturing companies to connect with consumers: loyalty rewards and quality aftermarket service.
Customer Loyalty Programs
In a client case study released by The ISI Group, an organization focused on providing loyalty and channel sales incentives, a Manhattan clothing manufacturer faced the issue of consumer disconnect. Since the clothing company sold directly through distributors, the best way to strengthen their link to their consumers was by improving communication with those distributors. According to Jeff Cagle, Director of Sales at Incentive Solutions (part of The ISI Group), “Usually, the most important step in establishing a loyalty plan for manufacturers is deciding who to communicate with in the sales channel: distributors, dealers, contractors, consumers, all of the above?”
Often, manufacturers need to make stronger impressions on consumers while keeping relationships with distributors positive. Not every manufacturer’s situation is the same. In some cases, the best strategy may be to offer rewards to distributors. The best customer loyalty strategies are the most comprehensive, however, including distributors, sales teams, contractors, and consumers.
For Incentive Solutions' clothing line client, they addressed the problem by arranging a flexible, points-based customer loyalty program. The program included multiple options for communication and promotion, allowing the manufacturer to track activity and collect consumer data through the admin portal while buyers could submit qualified purchases and earn cyber currency. They could then redeem points for items in the program’s reward catalog.
By rewarding consumers for their business, the clothing line was able to establish relationships and develop their brand awareness. Incentive Solutions reported that the manufacturer’s sales increased and that they continued to reap benefits afterward.
Aftermarket service is another important factor for manufacturing companies looking to improve customer loyalty strategies. Many organizations may view aftermarket service as a necessary evil. Aftermarket service often means non-working products or services, unhappy customers, or distraction from sales and marketing. Rather than being seen as a tiring obligation, though, aftermarket should been as a realm where loyalty is made. Just as with people, trying times are opportunities for businesses to demonstrate their virtues. As manufacturing and management experts stated in a Harvard Business Review article, “Corporations such as ABB, Caterpillar, GE, and Saturn have won customers’ undying loyalty by providing top after-sales services.”
Much aftermarket opportunity is lost to competitors’ generic add-ons and replacements. Another method of improving aftermarket performance is by offering consumers rewards for buying your brand’s parts instead of competitors’. Incentive Solutions has manufacturer clients who use loyalty programs to specifically reward aftermarket purchases. Cagle says, “People are often attracted to cheaper or easy-to-get aftermarket products, especially parts. As the manufacturer, if you can offer benefits to choosing your brand, then consumers are more likely to continue their relationship with you even after the original purchase.”
End-consumer communication doesn’t have to be an insurmountable problem for manufacturers. Although today’s consumers are more hesitant, it’s only because they want to be sure they’re choosing distinguished brands that offer quality service and customer appreciation. Conscious buyers are more responsive to companies that distinguish themselves from others, and will remain loyal to brands they can trust. As a manufacturer, you can make your brand more visible by actively rewarding customer loyalty and providing outstanding aftermarket service.
Agrawal, N., Agrawal, V., Cohen, M. A. (2006, May). Harvard Business Review. Winning in the aftermarket. Retrieved from https://hbr.org/2006/05/winning-in-the-aftermarket
Gerzema, J., D’Anthonio, M., 2010. Spend shift: how the post-crisis values revolution is changing the way we buy, sell, and live. San Francisco, CA. Jossey-Bass.