Creating a loyal brand starts with creating a product that stands for something.
It must be unique, something that your customers can relate to and something that they want to be. North Face for example has built a brand around an active outdoor life that includes hiking, trail running, skiing, and much more. Their advertising reinforces to the consumer that when they wear North Face, they are buying into the feeling of being an active outdoor athlete. The reality is, most of North Face's loyal customers live in the city, not in the country, but because "active in the outdoors" is what many active, athletic consumers living in the city want to feel, the North Face provides them with an emotional escape from the city.
Emotional connection with a product and company can help firms even in commoditized markets succeed. Can you name the computer company with the most loyal customer base? If you said Apple, you are absolutely correct. In fact, Apple is the only computer company that has effectively "branded" their computers. Dell, Gateway, and the rest of the computer manufacturers have all been clumped into the same "PC" category that consumers cannot tell the difference between and among PC's. Apple appeals to the "cool + hip" computer lovers who wouldn't be caught dead with a PC. Are there computers any better? Maybe, maybe not, and honestly it doesn't matter. What makes Apple stand out as a company is their focus on appealing to the emotions of their target "tech-savvy" consumers.
When products don't have a strong brand presence, they become commoditized and easily susceptible to price erosion and price competition with its competition. Even though Apple is not the #1 computer company in the world, it has created a strong brand for its line of products that earn it a much higher profit margin than comparable computer companies like Dell, Sony, and others. When you create loyal brands, you create premium priced products that offer you greater profits than the competition. Generics and commodities have their place in the market, and they always will, but the majority of consumers still shop for the brands that they feel most connected with and as Apple continues to expand its brand, it will acquire more loyal customers in the process.
The last example I will share with you that is not near as large as the North Face or Apple, is Bear Naked Granola. This was a company that literally started making home-made all-natural granola in the kitchen of their parent's home and grew to over $40 million in revenues before being purchased by Kashi, a subsidiary of Kellogg. BearNaked wasn't the first company to stamp "all-natural" on their granola, but they were the first ones to effectively support their claim by sponsoring athletic events such as Mt. Bik races, running events, and more. By doing so, they connected directly with their target market of athletically-minded consumers who wanted to put "all-natural; good-for-you" ingredients into their bodies.
For your own product and business, think about how and why your target consumers want to be associated with your product and your brand. What emotions are you invoking in them that inspire them to select your product over the hundreds of alternatives? Is it a "cool + hip" factor like Apple, an outdoorsy athletic feel like North Face, or an "all-natural" like Bear Naked?