At a time when capturing and retaining consumer attention has become increasingly difficult, long-term loyalty and brand affiliation are invaluable assets for companies that genuinely invest in service, quality, and loyalty. Winning a customer’s trust today is more challenging as they are easily drawn to the next new and exciting product. This dynamic is the new constant and brands must continually innovate and upgrade their offerings to keep their existing customers engaged and connected.
I recently read an article where it mentioned, that Maruti has failed to upgrade loyalists moved to other options. But I stand to disagree. The brand, Maruti, once seen primarily as a middle-class choice, has successfully expanded into the upper middle class with models like the Ciaz, S-Cross, and Grand Vitara, even if it has not reached the luxury segment. When I was choosing my first car, Maruti’s longstanding reputation for reliability, cost-effective service, and extensive service network made it a top contender. However, I was initially hesitant due to the car models available. The launch of the Ciaz, with its plush interiors and upmarket positioning, resolved my hesitation. Despite owning a car associated with luxury, I needed a reliable yet modern vehicle, and Maruti’s ability to reinvent itself through innovation met that need. This successful move shows how a company can strategically update and reinvent itself to successfully maintain and even increase client loyalty. Maruti has proven how to strike a balance between innovation and brand integrity through its constant growth while maintaining its fundamental values.
Diversification is an effective strategy for managing upgrade loyalty. Once a brand proves itself in one niche it can more easily adapt its model to similar segments. The challenge arises when strong marketing and positioning causes a brand to become pigeonholed, making it harder to enter new segments. When Sabyasachi partnered with H&M to launch an affordable line of clothing, the collection was criticised for diluting the brand’s exclusivity and craftsmanship, despite selling out.
On the other hand, when a mass brand tries to enter the premium segment, it faces the challenge of non-adoption of its ability to offer high quality. This can be mitigated through strong and quality branding and also storytelling that builds on the brand’s trusted reputation while emphasising premium aspects. For example, Titan succeeded with Titan Raga, a premium jewellery-inspired watch range, and Parle with Parle Milano, a premium cookie with luxurious packaging aimed at targeting urban and higher-income consumers. These approaches show how effective branding and narrative can bridge the gap between mass-market and premium segments.
Brands should place a high priority on ongoing innovation and keep a close eye on the changing demands of their consumers to properly manage customer loyalty. To make updates improve their value offering without undermining their essential principles, brands need to strike a balance between their legacy and contemporary innovations. Communicating the brand's dedication to innovation and providing consistent quality and service are crucial to fostering good customer connections. Brands can effectively maintain and grow their client base by being relevant, adapting to changes in the market, and cultivating current consumer loyalty. Brands that prioritise both trust and innovation will be better able to maintain customer loyalty over time and adjust to changing demands.
In today’s time, when the customers are spoilt for choice, customer retention is essential. Acquiring a new customer can cost 5 to 7 times more than retaining an existing one. Studies show that increasing customer retention rates by just 5 per cent can boost profits by 25 per cent to 95 per cent. Loyal customers also tend to spend 67 per cent more than new ones (as per a study done by Forbes) highlighting the importance of offering personalised experiences, consistent value, and exclusive rewards to encourage long-term engagement.
By strategically upgrading offerings, diversifying, and effectively branding, companies can foster lasting customer loyalty. Prioritising innovation, understanding consumer needs, and delivering quality service are key to building relationships and achieving long-term business success.
