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 behaviour no longer hold true in the current marketplace, writes Nick Watson, VP of Client Success EMEA at Cheetah Digital.
According to Cheetah Digital’s recently published 2022 Digital Consumer Trends Index, even the 76% of UK 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. In this article, we take a look at the most critical consumer facts and statistics changing the way we approach customer loyalty today.
There’s no denying that the world we live in has changed immeasurably over the past two years. We’ve seen a global pandemic, the rise of e-commerce, and a full-fledged war on Ukraine. This has created an environment where a strong brand is not the competitive advantage it used to be. And new consumer behaviour patterns are starting to take root.
Today’s consumers are highly opportunistic. And why wouldn’t they be? Thanks to advancements in technology, they have all the tools to act on better offers or easier fulfilment at their fingertips.
What’s more, modern consumers are also highly protective of their data, and how it’s used. And they expect the brands they do business with to reflect their values. However, that doesn’t necessarily mean they’ll pledge their loyalty.
That’s a lot for any brand to juggle. To help with the heavy lifting, we combed through the results of our recently published 2022 Digital Consumer Trends Index to highlight the eye-opening stats affecting customer loyalty today.
Habit vs Loyalty
70% — the percentage of UK consumers who frequently buy from the same company, yet say they’re not necessarily loyal to the company
Are your repeat customers loyal, or simply 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.
Oftentimes, brands will mistake habit for loyalty. But the two are definitely not the same thing: habits are developed, and loyalty is earned.
In fact, 70% of UK consumers who frequently buy from the same company, say they’re not necessarily loyal to the company. Our report also indicates that 76% of UK 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.
Emotional and genuine loyalty is an outcome. It’s a goal that can only be achieved by truly knowing and understanding your customers. And that comes from carefully nurturing every relationship you have. That means, every action, input and communication a customer receives needs to make them feel valued and respected.
However, too many brands still invest far more resources into customer acquisition efforts than customer retention efforts. While gaining new customers is important, maintaining existing customer relationships is too.
Here are a few reasons why customers leave to other brands:
● 30% of UK consumers have left a favoured brand because they didn’t feel valued as a customer
● 28% of UK consumers have left a favoured brand because other brands have better promotions
● 28% of UK consumers have left a favoured brand because other brands have better buying options
● 38% of UK consumers have left a favoured brand because of its stance on social, political or environmental issues
Product vs Trust
110% — The YoY 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. However, the one that beats them all is the recognition of the individual. There’s been a 110% YoY (year-on-year) increase in consumers citing “the ability to understand me as an individual” as a factor of brand loyalty.
The other top drivers of loyalty are fairly simple and probably ones you already know like great product or service (55%), great customer service (38%), useful loyalty program (34%) and convenient to use (31%).
Of course, investments in those areas will ensure a long-term return and will help you differentiate from competitors. But there’s come a point when 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 of the other factors equalise.
That’s where relationships come in. It’s vital to understand how consumers feel not just about the product they bought, but the experience they had when they bought it as well as who they bought it from.
Other brand loyalty factors with the biggest YoY increases are:
● Treats my data with respect: 71%
● Aligns with my personal values: 58%
● Admirable loyalty programs: 55%
This rise in conscientious consumerism, where customers proactively educate themselves on a brand’s corporate, ethical, and environmental values, is a burgeoning loyalty driver with staying power.
Customer Acquisition vs Retention
40% — The percentage of consumers who would remain loyal to brands that provided extra value other than product or price (a 67% YoY increase)
When it comes to loyalty, the cheapest price point isn’t everything. Brands who foster loyalty do so by creating emotive bonds, fostering community and recognising the customer as an individual.
Marketing departments are continuously working to envision new and interesting ways to keep their customers engaged, retained and loyal in a world full of infinite choices. In this new era, where the consumer is digitally savvier than ever, traditional loyalty programs just won’t cut it. They’re too transactional, stale and ineffective at significantly changing consumers’ perceptions and behaviours.
In fact, just over a third of UK consumers (35%) say they’re not loyal to any given brand because the brand did nothing to encourage their loyalty, even though they’re frequent shoppers. Brands need to do better than that. And they can by offering more to remain in consumers’ good graces.
These are the things UK consumers say brands can offer to keep them loyal:
● Discounts
● Rewards Points
● Exclusive/Early Access
● Personalised Recommendations
● Recognition
● Contests
● Community Features
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 and ineffective tactics. Fresh data on the rapidly changing mindset of today’s consumer is critical to ensure an effective strategy 100% of the time.
These stats are just the tip of the iceberg. Deep dive into more research, analysis, and insights on customer loyalty today by downloading your copy of Cheetah Digital’s 2022 Digital Consumer Trends Index here.
About Cheetah Digital
Cheetah Digital is a cross-channel customer engagement solution provider for the modern marketer. The Cheetah Digital Customer Engagement Suite enables marketers to create personalised experiences, cross-channel messaging, and loyalty strategies, underpinned by an engagement data platform that can scale to meet the changing demands of today’s consumer. Many of the world’s best brands, including Starbucks, Hilton, The White Company, Levi’s, and Williams-Sonoma trust Cheetah Digital to help them drive revenue, build lasting customer relationships, and deliver a unique value exchange throughout the customer lifecycle. To learn more, visit www.cheetahdigital.com.