Brand Loyalty

A brand’s value to a firm is largely created by the customer loyalty it commands. A brand without a loyal customer base usually is vulnerable or has value only in its potential to create loyal customers. The impact of brand loyalty on marketing costs is often substantial. It is simply much less costly to retain customers than to attract new ones. A common and expensive mistake is to seek growth by enticing new customers while neglecting existing ones. The loyalty of existing customers also represents a substantial entry barrier to competitors because the cost of enticing customers to change loyalties is often prohibitively expensive.