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How stories create customer loyalty

If done well, a story will lead to greater engagement and connection with your audience. Consider how you can share appropriate stories to increase or establish customer loyalty.

Sharing stories can be a powerful and effective way for companies to create customer loyalty. As humans, when we hear or read stories, different parts of our brain are stimulated and an emotional response is provoked. This emotional reaction can mean we feel something towards the person telling the story, which helps create connection and can in turn lead to greater loyalty.

In the 2014 Harvard Business Review article, ‘Why your brain loves good storytelling’, neuroeconomist Paul Zak revealed the powerful impact the love hormone oxytocin has on the brain when we tell stories.

Oxytocin is also often referred to as the ‘trust hormone’. Our bodies release it when we are with people we love and trust, when we hug, or even when we shake hands in a business meeting. And it’s released when we listen to or read stories.

Oxytocin being released signals to the brain that everything is okay and it is safe to approach others — essentially, that we won’t be attacked or eaten, as would have been the risk for our ancestors.

So not only does a good story make us feel different emotions and a connection to the storyteller but, at the same time, the love hormone oxytocin is also signalling that we can be trusted and therefore strengthens the connection and builds loyalty.

Fundamentally, this is important because emotion impacts our decisions, for example, decisions such as, ‘Do I buy from you?’. We are loyal to people we trust and the same applies to companies and brands. We continue to buy from companies we trust.

Marketing executives and advertisers are acutely aware of the power of using storytelling and emotion in business to drive purchasing decisions. A study of more than 1400 marketing campaigns submitted to the UK-based Institute of Practitioners in Advertising (IPA) rated how effective marketing campaigns were, based on profit gains.

The results showed:

  • Campaigns based purely on emotion were rated as 31% effective
  • Campaigns based purely on logic were rated as only 16% effective
  • Campaigns that combined emotion and logic were rated as 26% effective.

This research indicates that using logic alone has the least impact and using emotion has almost double the impact. Therefore, sharing stories is a powerful way to create a connection and build customer loyalty.

One company that does this brilliantly is New Zealand-based shoe company Merchant 1948. They have a section on their website called ‘Stories’, which includes a collection of anecdotes from the founders; about their grandparents, employees and products.

When I first came across their website I was so impressed with their authentic use of storytelling and their stories that I went to a store the very next day and brought a pair of shoes.

Georg Jensen also have a section on their website specifically for stories. It features five leading females in their respective fields including a chef, a comedian, a film director, a world champion boxer and a motocross rider from Iran (where women are banned from riding motorcycles on the road). The stories have minimal text as they are shared via videos.

The overriding theme is, ‘You can never be too much of you’, which is captured in a summary video that features all five women. For every company that successfully shares stories to create customer loyalty, there are many other businesses that don’t.

Too many companies are reverting to simply calling something ‘Our story’ when in most cases it is a statement of facts. A well-crafted and authentic story will lead to greater engagement and connection with your audience. If you want to create customer loyalty, consider how you can start to share authentic, appropriate and relatable stories.

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