7 Risks of Brand Loyalty That Businesses Overlook

Customer loyalty can be defined as the tendency of customers to remain with an organisation despite changes in price and other unpleasant circumstances. At times, customer loyalty can be a burden to the organisation and the entire niche if it is not done in the right manner. In this article, I want to look at some of the risks of brand loyalty that organisations are likely to overlook.

#1 Reduced Price Sensitivity

One of the very first risks that can be overlooked is the tendency for customers to love the organisations so much that they do not even bother about price. Some organisations continue to increase prices and reduce quality for no justifiable reasons. Despite that, their customers refused to look for alternatives. This is very bad for competition.

#2 Complacency

Some organisations have built loyal customers that they are not even innovating again. They are not innovating because they believe that they are already controlling a larger chunk of the marketing share. Despite that, loyal customers refused to leave such organisations. This is also not good for competition.

#3 Difficulty Attracting New Customers

At times, organisations are bothered when they are not making sales, but they never bother about making new customers. There is a slang that I also have as a person that can be so dangerous. I always emphasised that it is better to satisfy existing customers than to be looking for new ones.

As good as this statement is, it can lead to a situation where organisations devote most of their funds to loyal customers and forget to allocate funds for marketing.

#4 Vulnerability to Brand Damage

If the brand experiences a scandal, decline in quality, or negative publicity, loyal customers might continue to support it, causing long-term damage to reputation and sales. This at times can lead to a situation where the organisation refused to admit their mistake and apologise to the general public.

#5 Overdependence

Relying heavily on loyal customers can create vulnerabilities if that segment’s preferences change or if competitors successfully lure them away. Most times , you might rely on a particular customer segment that are loyal to you and you refused to attract new customers.

If they are functional loyal customers, they will move to a competitor once a better offer present itself to them.

#6 Potential for Stagnation

Loyal customer bases may resist innovation or new product offerings, leading to stagnation and reduced market relevance. There are times that organisation might want to try something new but loyal seems not to be too enthusiastic about it.

They may refused to innovate just because they are afraid of loosing their loyal customers.

#7 Exclusion Risk

Highly loyal brands may inadvertently alienate new or minority customers if their loyalty is built on specific values or aesthetics that are not universally shared.

Understanding these drawbacks helps brands strike a balance between fostering loyalty and remaining innovative, competitive, and inclusive. Would you like more insights or examples?

Conclusion

You need to understand that having a loyal customer is good but at times it can be a two edged sword which can affect customers, the organisations and their competitors. Organisations should not be afraid of trying new things. More so, you should always go all out for new customers. You can not allow that task to rest solely in the hand of your satisfied customers.

If you need help attracting new customers or retaining existing customers, you can drop your comments. Let us also know what you feel about this topic in the comment box.

It’s time to take action.

Join Our Community

Follow Us on Facebook