In an era where the customer is king, brands are struggling to grab and maintain a share of the customer’s wallet and mind.
When it comes to ensuring that customers stay loyal to a brand, the first step would actually be to understand what makes consumers fickle with their brand loyalty in the first place. But with the fragmented media space, this is not easy
While some marketers may say loyalty is now a thing of the past, others argue that having a loyalty programme is how marketers can gain an insight into the likes and dislikes of distracted customers. That in turn, gains them some undivided attention with their consumers.
According to Rare Consulting’s Redefining Loyalty report, 65% of customers will still shop with the brand even if its loyalty programme ceases to exist. In fact, only one in three people said that loyalty programmes are a vital ingredient for a consumer’s relationship with a brand. But what a loyalty programme does is open up avenues to understanding the consumer.
When asked what loyalty meant to them, respondents cited brand trust, customer experience and being rewarded as aspects of loyalty.
Getting up close and personal
The demand for a personalised customer experience is now higher than ever. This is supported by a report by Rare Consulting, which found that personalisation varies for consumers across different generations. About 54% of participants from Generation K (the generation after the Millennials) and 52% of Millennial participants felt that personalisation was a high priority.
Meanwhile, only 48% of Generation X participants and 40% of Baby Boomers felt it was a priority. However, drivers of purchase consideration may vary across life stages. For example, when it comes to younger audiences such as the Millennials, location, returns and store designs are more influential on their purchase decisions in comparison with other generations.
The report also found that customers regard loyalty as a two-way relationship. This means their behaviour and commitment needs to be recognised in some way to provide a satisfactory experience. A good loyalty programme can help that.
Moreover, it is also essential for brands to deliver on their promise to provide that ideal experience.
Clarence Chew, Decathlon’s head of marketing and communications, agreed saying that customer loyalty is defined by the relationship a brand has with its customers.
“It is extremely important as customers now have the power of choice and there are many brands competing for the same attention. Another challenge is how to differentiate between a buyer and user in order to enhance the relationship between our brand and the customer,” he said.
The study also found that trust was a central theme in the research findings when it came to customers’ definitions of brand loyalty.
In fact, brand trust is something which is considered fundamental to building loyalty, which is a popular theory. Rare Consulting frames brand trust as the occurrence when a brand “delivers on its promise”.
Trust is found to be developed based on a belief in the trust of what a brand says to its consumers along with a sense of reliability.
Trust will then also lead to brand love, which is also an important driver for customer loyalty. While the specifics of what makes people love a brand are different across the various generations, positive perceptions of the brand and emotional connections are key.
There are also several other facets which contribute to customer loyalty. This includes shared values and perceived quality.
When it comes to shared values, the likeability of a brand plays an important role.
Not only does it relate closely with a brand’s image, it also arises from an alignment of brand attributes with a consumer’s preferences.
The findings also indicated that when it comes to more general purchase decisions, the biggest factors which influence a customer’s decision usually revolves around price, quality and convenience.
This is consistent with findings from a 2015 Nielsen global survey called The Future of Grocery which found that the top three factors when it comes to store switching includes price (63%), product quality (59%) and convenience (54%).
The results come in higher in Asia Pacific as compared to the global average.
Meanwhile, special promotions (49%), store cleanliness (40%), selection and assortment of products (30%) and staff (24%) are also crucial factors mentioned when it comes to repeated store visits.
“The findings also indicated that when it comes to more general purchase decisions, the biggest factors which influence a customer’s decision usually revolve around price, quality and convenience.”
Gaining brand affinity
Brand affinity is also important to Millennials when it comes to their brand loyalty as they believe what they buy is a representation of who they are.
Hence, they are more inclined to brands which play to their need for self-actualisation.
The Rare Report study also said that Generation K tends to be more driven by experiential benefits such as personalisation and fun.
Their propensity to trust a brand is higher than the other generations as they are more open to some of the less functional benefits of a loyalty programme.
Meanwhile, members of Generation X place greater emphasis on ease of use and quality, which highlights the importance of the overall experience, whereas Baby Boomers take a more utilitarian view with value for money and reliability