Article by Courtney Wylie, VP of Product & Marketing Mention Me
Being trustworthy, credible, and having good customer service have beaten discounting and price in a third annual research report ranking of customer advocacy trends.
While consumer trust in influencers, celebrities and online reviews is in decline, personal recommendations are most heavily influencing consumer buying decisions and ethics have become even more influential. Brand attributes and behaviour around sustainability and social responsibility proved paramount for all respondents.
The customer loyalty landscape has become a far trickier one to navigate. Brands can no longer remain stagnant and rely on unwavering loyalty from existing customers.
With this pressure on brands adding to an already turbulent economic climate with its own challenges, what can marketers glean from this insight into customer advocacy? Against this increasingly consumer-driven marketing landscape, how can they retain customer loyalty?
Who do your customers trust to refer your brand?
Based on the responses of 2,000 UK consumers on what makes them likely (and unlikely) to recommend a brand, we conducted this research in November 2019 to equip our 400+ clients with insights into how they can build customer loyalty to fuel long-term business growth. Proving that consumers are increasingly cynical of mainstream advertising and value brand trust and credibility, our report reveals that 41% of consumers are deterred from recommending brands their friends or family have advised to avoid.
Also evident is a growing consumer backlash against celebrity influencers, as well as against the newer trend of virtual influencers. Just 3% trust the recommendations of this group, whether real humans or CGI creations. Our research also reveals that consumers are losing trust in online reviews, with just 11% highly trusting them. So if these marketing efforts to engage consumers and drive repeat business are failing, what’s next for brands?
According to the research, there’s a good reason to be positive. More consumers are referring brands than ever before – 37% of those questioned had recommended a brand in the past month, rising to 63% over the past four months. If your business provides a great product and strong service, this presents good news. Rather than investing in expensive traditional and digital marketing channels, our findings suggest you’re more likely to see a return on your money with a referral programme that tracks and incentivises word-of-mouth about your brand. Central for brands among this is focusing on how to turn customers into long-term loyal advocates. Acquiring new customers is one thing, but what really matters is if they’re going to return. So how should brands approach this?
The impact of brand ethics on customer loyalty
Brands need to focus on what really matters to consumers and reflect this honestly in the values they communicate. For the third consecutive year, our research highlights an increasing consumer awareness of sustainability and social responsibility, and how this influences the brands that they choose to shop with. In 2020 brand ethics are more important than ever. This is particularly prevalent among Generation Z, with almost half (48%) of 18-24 year olds considering a brand’s environmental credentials as very important. While this decreases to 27% in the 55+age group, 49% of this group said they’re more likely to refer brands committed to scrapping plastics. This underlines the mounting pressure on brands to exhibit environmentally-friendly behaviour, regardless of their target demographic.
Many marketers now need to completely rethink and re-position their sustainable business policies and values in order to remain relevant. With the risk of businesses making false claims having their reputations destroyed in seconds on social media, these efforts cannot be half-hearted or misleading.
Certainly more due diligence is needed, but with ethical values so intrinsically linked to our hearts and minds, the opportunities for brands to engage with their customers to create and sustain loyalty is huge.
Customers buy into brand personas and don’t want to risk damaging their reputation by recommending unethical businesses to friends. Brands need to address factors such as paying workers a fair wage, being environmentally friendly, and hiring locally. Promoting initiatives that help customers be more sustainable – such as H&M’s Conscious (affordable) fashion range, Sainsbury’s 20 by 20 Sustainability plan, Allplants’ sustainable vegan food delivery, OVO Energy’s zero carbon living pledge – will help engage your shoppers, build an emotional connection, and ultimately turn them into long-term loyal customers.
Sustaining Customer Loyalty in 2020
So what has our research taught us about how brands should behave in order to move beyond customer acquisition to understanding what drives and motivates customer loyalty? After all, the cost of acquiring new customers can’t be justified if they shop once, never to return.
Brand transparency and trust is paramount. The new, more ethically conscious consumer is less focused on price (think fast fashion), and more interested in brands’ ethical footprints. Customers want to emotionally connect with brands, and be proud to tell their friends and family about them. Reputations can no longer be built and sustained on good products alone. Transparency around how products are made, and how those who make them are paid, matters. The wise brand marketer should take this as an opportunity, not a threat. Win consumers’ emotional investment in your brand, and their loyalty will drive significant growth for your business.