Past purchases are no indication of current or future brand loyalty
New research finds low levels of perceived loyalty by consumers towards brands and concludes that at least some brands are confusing repeat purchasing with loyalty.
The joint research, “The Loyalty Paradox: How to Create Connected Experiences That Keep Customers Returning,” from UK-based digital consultancy Kin + Carta and first-party customer data providers Edit, argues brands should create a balanced scorecard that looks at purchase RFV (recency, frequency, value), alongside key engagement measures, such as:
- How and where customers interact;
- If they follow the brand socially;
- Whether they regularly engage with content;
- If they are subscribed/signed up-to communications and if they open them;
- Whether they open feedback.
The scorecard should also take in advocacy (i.e., whether they actively promote the brand and refer it to friends).
Using this loyalty criteria, a survey of 2,000 consumers split between the U.S. and UK exploring loyalty, personalization and customer experience across a broad range of sectors determined more than a quarter (27.4 percent) showed no brand loyalty at all. Among the sectors, e-commerce scored the worst, with only six percent of consumers claiming loyalty to brands within that vertical versus 21.5 percent for offline retail – food and drink and 12 percent for offline retail, excluding food and drink.
Key factors at play in keeping consumers attracted to a brand were found to increasingly relate to the “control and choice they have around interaction.” Kin + Carta said this is somewhat expected given the freedom online purchasing has given buyers while reducing the bonds to physical service factors, which had anchored consumers to their preferred establishments.
Gary Arnold, customer data director, Kin + Carta, said in the report, “Once they have a better definition of ‘loyalty’ which moves beyond repeat purchase, it’s possible to identify the common traits of this core ‘loyal’ audience and use that to drive acquisition and retention strategies more tailored to them.”
- Why the future of loyalty is built on good habits – Econsultancy
- How Low Will Brand Loyalty Go? – Winsight Grocery
- The pandemic has destroyed customer loyalty – MarketingTech
DISCUSSION QUESTIONS: Have habitual purchases become a less reliable indicator of brand loyalty? Have engagement and advocacy become significantly more important factors in fostering loyalty with the continued advancements in online selling and engagement?