What do United Airlines, YUM! Brands, Kohl’s, Ulta Beauty, and Estée Lauder have in common? Their leaders are talking about brand loyalty as a driver of business performance.
Yum! Brands CEO Chris Turner remarked in the YUM! Brands’ August earnings call (Q2 2026): “Loyalty creates better experiences for consumers, stronger engagement with our brands and more powerful, demand-driving tools for franchise partners.”
Brand loyalty has long been disparaged. Beginning decades ago, pundits of all sorts rallied behind the cry “Brand Loyalty is dead.” Even when faced with reams of data demonstrating the importance of brand loyalty, many marketers continue to prioritize customer acquisition over strengthening relationships with core customers.
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Kohl’s, the struggling department store, would disagree with chasing new shoppers rather than growing its loyal customer base. Kohl’s, despite a less-than-exciting earnings call, indicated that the 1% increase in Kohl’s Card sales is a “… key indicator that (Kohl’s) is actively regaining loyalty from their core customer base.”
Technological, digital innovations are forcing brands to reexamine the effectiveness of their marketing processes and practices. Many owners of great brands are changing their approaches to brand marketing. What we see is that instead of being brand builders, many brands have become better at brand exploitation.
Wall Street, with its financial engineers and shareholder allies, has relentlessly focused on improving the bottom-line performance of brands. But, here is a fundamental fact. You cannot cost-manage your way to enduring profitable growth. There is no enduring, profitable growth of the bottom line unless there is quality growth of the top line.
Over the years, data show that market share and profitability correlate. On average, market leaders are also more profitable. But peek behind the data. Not all market leaders are profitable. Over time, unprofitable brands do not maintain their market-leading position. A better conclusion from research on market leadership is that becoming number one at any cost is unsustainable.
How you grow your brand is important.
Developing a profitable market leadership position results from quality revenue growth. Quality revenue growth is the simultaneous growth in quantity and quality of sales.
The two driving forces of quantity of sales are availability (market penetration) and promotion.
- Availability – Be available to as many people as possible. Increase distribution. Increase the scope of your business. Increase market penetration. Always be on the lookout for new customers, new markets, new countries, and new business opportunities. But, this is purchased growth, not quality growth.
- Promotion – Do whatever it takes to get the brand into the hands of potential buyers. Cut price. Discounts. Deals. “Let’s make a deal.”
Availability and promotion are the major levers for volume growth. But these actions have led to profitless prosperity. This is not the goal. The goal must be enduring profitable growth: to grow profit and revenue simultaneously.
How do brands accomplish this goal? Through quality revenue growth, that is, the simultaneous growth in quantity and quality of sales. What is quality of sales? It is the share of your sales from brand loyal customers.
A key issue for marketers is designing and implementing systems to increase the quantity and quality of sales. Sales volume is driven by market penetration. Quality of sales is driven by brand loyalty. How do we increase quantity and quality of sales simultaneously?
Be the best value in every market in which you choose to compete. Value is more than just quality and price. Brand power contributes to brand value. Brand loyalty contributes to brand value.
Brands must follow these steps.
1. Build Brand Power
Building and maintaining brand power is the first step, but it is an ongoing task.
Brand power consists of three components. 1) Be familiar. 2) Have authority. 3) Be special. Familiarity means knowing enough to have an opinion. Do not confuse awareness and familiarity. Awareness is yes/no; like a light switch. Familiarity is a scale: the more you know about the brand, the more familiar you are with the brand.
Authority means the brand is a function of quality, leadership, and trustworthiness (QLT). Building brand authority continues to increase in importance as trust in institutions dwindles. Quality is essential. Leading just does not mean being the market share leader; it also means leading the way through innovation. Be worthy of the customer’s trust.
Be Special by being the most relevant and differentiated brand.
Brand Power correlates with perceived brand value. Data show that as brand power increases, so does perceived brand value. This makes sense. Customers value powerful brands. Aim to build Brand Power.
2. Create And Reinforce Brand Loyalty
As Estee Lauder noted in its latest earnings call, “(Our) core prestige and premium skincare, makeup and fragrance franchises continue to thrive because consumers demonstrate deep brand loyalty and resilience despite broader macroeconomic fluctuations.”
Create and reinforce brand loyal customers. The most valuable thing a brand can do is create a loyal customer and, then, continually reinforce the wisdom of that customer’s brand decision. How does a brand build brand loyalty? Satisfy customers. But keep in mind, customer satisfaction alone does not necessarily lead to brand loyalty. Customer satisfaction is the entry point; the green fee a brand must pay to get into the game. While customer satisfaction alone is not the answer and while satisfaction does not guarantee loyalty, dissatisfaction all but guarantees disloyalty.
Focus on converting a satisfied customer into a brand loyal customer. Repeat behavior is not the same as brand loyalty. Marketers tend to focus on repeat behavior. This is wrong. Do not confuse repeat behavior with brand loyalty.
Just because someone is a repeat purchaser does not mean they are brand loyal. Brand loyalty is more than repeat behavior. Repeat behavior is just that – a behavior. True brand loyalty is repeat behavior based on true commitment to the brand. Brand loyalty is purchase behavior based on actual preference for the brand. Brand loyalty is based on a customer’s conviction that this brand is the superior option for satisfying a particular want on a particular occasion. Brand Loyalty is like a ladder. There are degrees of commitment to the brand. There are four levels of brand commitment. This loyalty continuum is the Brand Loyalty Ladder.
3. Move Customers Up The Brand Loyalty Ladder
Every brand has four kinds of users, each with differing levels of commitment. There are Category buyers who think all brands are the same. They buy the category and then look for the best price. There are Short-list buyers. These are people who have a few brands they like and purchase, but within this short list, these customers are indifferent to which brand is purchased. Preference buyers are next. All things being equal, Preference buyers prefer your brand. There are the Enthusiasts. Enthusiasts really love your brand. They love the brand so much that they will still buy it even when their second-favorite brand costs less.
However, take Enthusiasts for granted at your peril. At what point would a price cut by their second-favorite brand make your brand’s Enthusiasts indifferent to your brand? Pricing must be a strategic tool, not a tactic. Understand the indifference point for each of your brands.
As people move up the Brand Loyalty Ladder, marketing costs go down, price elasticity goes down, people buy more of your brand, and are more willing to try new products introduced by your brand. As brand loyalty increases, profitability also goes up.
The Brand Loyalty Ladder shows that there is no such thing as a mass brand. The majority of customers may be category and shortlist buyers. Only a few may be genuine Enthusiasts. True. But a small movement up the Brand Loyalty Ladder can have a big impact on brand profits. Why? Because brand Enthusiasts are eight to ten times as profitable as category buyers. A small change can make a big difference. Data show that, on average, a 5-percentage-point increase in brand loyalty will produce a 25% improvement in brand profitability.
How many times have you looked at your brand’s user base and said that your customers just are not loyal? This is true, on average. Counting each customer as the same is nonsense. When a Brand Enthusiast is worth 8 to 10 times more than a Category buyer, use value-weighted voting, not one-person-one-vote. This will dramatically change how you evaluate new products and how you plan, develop, and execute marketing programs.
4. Recognize That Loyalty Is Not The Same As Retention
Focus on both customer retention and customer acquisition. This is good, but not good enough. Not all of your brand’s retained customers are brand loyal customers. Customer retention can be bought through bribes. Repeat behavior is one part of loyalty. But brand commitment is necessary for true brand loyalty.
Brands continue to measure repeat behavior and call it loyalty. There are Loyalty Programs which are, in fact, retention programs. Brands measure success by evaluating customer retention, when brands should ask, “Have we increased true brand loyalty?”
Further, evolve your thinking from acquiring and retaining customers to creating and reinforcing brand loyal customer relationships. Move from retention marketing to reinforcement marketing.
There are a few basic principles of Reinforcement Marketing. All these principles begin with “R”.
Recognize. Create customer recognition programs. Affinity programs work well, too. Affinity programs recognize a person’s individuality by reinforcing issues that interest the customer.
Respect. Treat customers with respect. People want to be treated as if they are important. Respect your customers if you wish them to respect you.
Reinforce. Reinforce the relationship customers have with your brand. Reinforcement means “to make stronger.” Do what you can to strengthen the relationship between your customer and your brand. Look for ways to reinforce what helped make these great customers in the first place. Whom you acquire and how you acquire will influence what you need to reinforce. Acquire the right people with the right message. If you acquire a customer with a rebate, reinforcing the bond will mean offering another rebate. How you acquire customers matters. If you throw out a fish net with mass marketing, be prepared to have a motley mass of customers, not all of whom will become your best customers. Make certain that all brand messages reinforce the message that attracted the customer to love your brand in the first place.
Reward. Reward does not mean bribe. A bribe is getting the same thing for less. A reward is getting more for the same. Upgrade the brand experience; do not downgrade the brand value. Build real loyalty, not deal loyalty. A reward program must encourage people to move up the Brand Loyalty Ladder. Make the rungs of the ladder aspirational and achievable. Customers must want to reach the next rung on the ladder and believe it is possible. Desirability and possibility are key motivators in a rewards program.
Rethink your loyalty programs. Are they really loyalty programs with desirable rewards, or are they mere retention programs? Are you focusing on attracting and keeping customers or on creating and reinforcing a brand bond?
Brand should strengthen competitive position, pricing power, and enterprise value. The Blake Project helps make that happen.
Practice the 4 R’s every day.
There is one more overarching principle. It does not begin with R.
Differentiate. Treating all of your customers the same is not a loyalty program. The essence of a loyalty program is distinguishing levels of commitment among your customers. This is why there are tiers of commitment within loyalty programs. Reward your best customers best.
Importantly, none of the actions detailed above will work unless there is measurement.
Measure What Matters.
Measure your progress. With all the data brands acquire, it is time to go beyond measuring sales and market share. Of course, a brand needs to know, “Have my sales gone up?” But it is essential to ask, “Has the quality of my sales gone up?”
Quantity and quality of sales lead to enduring profitable growth. Moving customers from category to shortlist to preference to enthusiast is profitable. Enthusiasts are worth more. They are worth a lot more.
United Airlines CEO Scott Kirby stated during the Q 2026 earnings report that he credited United’s 16% year-over-year revenue bump to United’s loyalty model. Mr. Kirby emphasized this performance win by saying, “United has proven that our brand loyalty strategy is working… My conviction in building a brand loyal airline is stronger than ever.”
Achieving profitable growth is easy to say. The challenge is to do it with consistence and persistence. Creating and reinforcing brand loyalty is the basis for enduring profitable growth.
Contributed to Branding Strategy Insider by Joan Kiddon, Partner, The Blake Project, Author of The Paradox Planet: Creating Brand Experiences For The Age Of I
At The Blake Project, we help leaders turn brand into a disciplined driver of financial performance — strengthening pricing power, competitive position, and enterprise value. Email us to start a conversation about enduring profitable growth. For The EBITDA.
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