• The global loyalty management market was valued at $2.617 billion in 2018 and the market is expected to grow at a CAGR of 23.3% to reach $9.28 billion by 2024.
• Traditionally, customer loyalty focuses on offering incentives to customers in exchange for loyalty points or product. However, this transactional model of customer loyalty does not cover the customers who are loyal because of the emotional ties they have to the brand.
• A study by CapGemini reported that customers that have high emotional engagement are more likely to have strong brand affinity as compared to those that have low emotional engagement.
• The study reported that highly emotional consumers buy their favorite brands 82% of the time when they need a specific item as compared to 38% for less emotional people.
• Emotionally engaged customers have more expectations of the brands they are loyal to including two-way interaction, real-time and varied interaction opportunities, and differentiated shopping experiences.
• There are three main types of customer loyalty:
•  Rational loyalty which is loyalty based on quantitative metrics like points and incentives.
•  Behavioral loyalty which is loyalty that is based on purchasing behavior and convenience instead of preference, sale, or emotional ties.
•  Emotional loyalty where customers do not buy as a result of incentives but rather as a result of customer service, storytelling, trust, and philanthropy.

TOMS Shoes

• An example of a brand that taps into emotional loyalty is TOMS Shoes.
• From the beginning, the company built a brand and business model on the foundation of giving where for every pair of shoe purchased, the company donated a pair to a child in need.
• Consequently, even though TOMS Shoes does not sell the cheapest shoes, consumers are committed to spending the additional money because of what the company gives back to the society.
• When consumers create emotional ties with socially-conscious brands like in the case of TOMS Shoes, they are 32% more likely to visit their store and are willing to spend on average 46% more.