As we head into the Christmas period, brands are in full festive mode, creating content they hope will inspire and engage customers. But loyalty is for life, not just for Christmas.
So, how well are brands faring when it comes to customer loyalty? In this digital age, behaviour and needs are changing at an astonishing rate, while technology has provided consumers with more choice at their fingertips than ever before. Are marketers doing enough to build long-lasting relationships?
According to a new study by Adobe and Goldsmiths, it seems not. In fact, ‘Reinventing Loyalty: The New Loyalty Experience’ found that 75% of marketing leaders fail to understand changing consumer behaviour.
Why is this such a problem? If a brand doesn’t take the time or use the right tools to get to know their customers, retention will drop and a negative knock-on effect on business performance will follow. Research discussed by Business2Community suggests a 5% rise in customer retention can enhance profits by 25% to 95%. Imagine the effect a 5% decrease would have!
The loyalty programme – is it enough?
When we discuss consumer loyalty, one of the main areas that springs to mind is customer loyalty programmes. But a recent article by Campaign suggests that these are not enough in today’s competitive world.
Campaign highlights Mintel research which found that 30% of customers use multiple loyalty schemes to ensure they get the best deals. This indicates that loyalty schemes are more about increasing purchasing frequency, rather than generating a truly meaningful connection between brands and their customers. Therefore, “loyalty programmes are struggling to matter to” consumers.
And this is a sentiment echoed in Adobe’s research. The study found that brands that are keeping up with consumer behaviour and incorporating new loyalty measures into customer experiences are outperforming those still using traditional loyalty methods by as much as 14%.
The reinvention of loyalty
The digital world has had an extraordinary impact on consumers and their brand expectations. It is, therefore, high time that marketers begin to reinvent loyalty, focusing on incorporating it to the overall customer experience.
A key way to generate loyalty is to tailor experiences to the needs and preferences of consumers, with 61% of Adobe’s respondents citing this as a driving force. But there appears to be discrepancies between marketers’ actions and their performance.
According to those surveyed by Adobe, 65% of marketing leaders say they target individual customer needs, however, only 32% use AI to enhance the customer experience, and just over half (58%) make all their services available on mobile.
To ensure you’re providing a new framework for loyalty, make sure you’re adapting to and meeting these key changing consumer demands:
61% purchase products and services that reflect their personal values43% want a relationship with companies they buy from61% are loyal to brands that tailor experiences to their needs and experiences50% said the introduction of innovative technology enhances the customer experience.
Make customer loyalty and experience the key focus for your marketing strategies next year. Speak to Fireworx today to see how we can help you better understand the demands of your customers.