There is a reason companies invest billions of dollars into marketing and advertising—Brand Loyalty. A long-term commitment to make recurrent purchases of a specific brand is not price dependent, it is a particularly potent driver of both profit and profitability. Brand loyalty creates customer stickiness, which in turn allows for pricing power and increased margins.Brand loyalty has been shown to exist even in the presence of seemingly equivalent substitutes. In other words, customers are loyal to brands even when there are functionally similar alternatives available at a lower price point. This speaks to the emotional connection that customers form with certain brands, often based on shared values or experiences.The benefits of strong brand loyalty are clear:1- Higher profits due to increased prices and decreased churn;2- Improved customer lifetime value; enhanced word-of-mouth marketing;3- Reduced costs associated with acquiring new customers. Therefore, companies should do everything they can to cultivate strong brand loyalties among their customers
