Whether due to the rise of e-commerce, the disruptions of the pandemic, or other factors specific to a given industry, the old patterns of consumer behavior no longer hold true in the current marketplace. A strong brand is not the competitive advantage it used to be. While consumers on the whole are loyal by nature, that holds true only to a point.
Cheetah Digital is the leader in technology and services for relationship marketing and their recent Digital Consumer Trends Index has some intriguing results.
According to their recently published 2022 Digital Consumer Trends Index, even the 81% of consumers who define themselves as loyal to certain brands say they’d still buy from competitors if it was cheaper or more convenient to do so.
The takeaway here is that even your most loyal customers can’t be taken for granted. Today’s consumer is highly opportunistic and has the tools to act on better offers or easier fulfillment. What’s more, they’re also highly protective of their data and how it’s used. And, they expect the brands they do business with to reflect their values.
That’s a lot for any brand to juggle. So, we’ve combed through the results of their report to highlight the three most important stats affecting customer loyalty today.
HABIT VS LOYALTY
Key Stat: 67% — The number of consumers who frequently buy from the same company yet say they’re not necessarily loyal to that company.
Are your repeat customers loyal, or just habitual?
People are creatures of habit and tend to stick with what they know and trust in the absence of any compelling reason to do otherwise.
But brands would be seriously remiss if they were to mistake habit for loyalty. Habits are developed. Loyalty is earned.
Emotional and genuine loyalty is an outcome. It’s a goal you can only achieve by truly knowing your customers and carefully nurturing every relationship you have. Every action, input, and communication a customer receives should make them feel valued and respected.
However, too many brands still invest far more resources in customer acquisition efforts than customer retention efforts. Gaining new customers is important, of course, but maintaining relationships with existing customers is just as important, if not more so.
Here’s a few reasons why customers leave to other brands:
31% of consumers have left a favored brand because other brands have better promotions
26% of consumers have left a favored brand because other brands have better buying options
21% of consumers have left a favored brand because they didn’t feel valued as a customer
19% of consumers have left a favored brand because of its stance on social, political, or environmental issues
PRODUCT VS TRUST
Key Stat: 110% — The YoY (Year over Year) increase in consumers citing “the ability to understand me as an individual” as a factor of brand loyalty.
There are many factors that drive brand loyalty, and the top drivers are fairly simple:
great product or service (55%)
great customer service (38%)
useful loyalty program (34%)
convenient to use (31%)
Sure, investing in these areas will ensure a long-term return and differentiate brands from competitors. But, a product can only be so good, or so cheap. Eventually there needs to be another level of effort to keep consumers loyal once all other factors become equal.
It comes down to relationships — how consumers feel not just about the product they bought, but about the experience of buying it (and who they bought it from). After “the ability to understand me as an individual,” the brand loyalty factors with the next-biggest YoY increase are:
treats my data with respect: 71% increase
aligns with my personal values: 58%
admirable loyalty programs: 55%
This rise in conscientious consumerism, with customers proactively educating themselves on a brand’s corporate, ethical and environmental values, is a burgeoning loyalty driver that feels here to stay.
CUSTOMER ACQUISITION VS RETENTION
Key Stat: 40% — The number of consumers who would remain loyal to brands that provided extra value other than product/price (a 67% YoY increase)
As we’ve now shown, the core of loyalty is not merely the cheapest price point, but a brand that creates emotive bonds, fosters community, and recognizes the customer as an individual.
Marketing departments are perpetually working to envision new and interesting ways to keep their customers engaged, retained, and loyal in a world full of infinite choices. In this era of the digitally savvy consumer, traditional loyalty program models are becoming outdated — too transactional, too stale, and not effective in significantly changing consumers’ perception or behavior.
In fact, nearly a quarter of consumers (24%) say they’re not loyal to any given brand because the brand did nothing to encourage that loyalty, even though they are frequent shoppers. Clearly brands need to offer more to remain in their good graces.
Here are the things consumers say brands can offer to keep them loyal:
Discounts (57%)
Rewards Points (52%)
Exclusive/Early Access (19%)
Personalized Recommendations (16%)
Recognition (11%)
Contests (11%)
Community Features (9%)
Few companies would argue against the value of loyal customers. But far too many are spinning their wheels trying to nurture customer loyalty using outdated, ineffective tactics. Fresh data on the rapidly changing mindset of today’s consumer is critical to ensure an effective strategy.
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