Rewarding loyalty is still crucial in retaining a customer base
Research reveals key drivers that keep consumers returning to brands time and time again
The technology sector ranks top of the UK’s first Brand Loyalty Index, following a study that questioned 7,000 consumers on their loyalty towards household name brands within the food, drink, household and personal care, technology and supermarkets sectors.
The study, launched by Sodexo Engage, provides insight into consumer brand allegiance covering variables such as temptation to switch products, favouritism, frequency of use, commitment, expectations and willingness to recommend a brand.
The research revealed that rewarding loyalty, brand heritage and product quality are key drivers as to why customers return to certain brands. Additional motivations include: value for money, promotional offers and understanding customer needs.
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“The Index proves that rewarding loyalty is being noticed by consumers and is an effective way to retain a customer base. UK consumers also value brand heritage, quality of goods and consistency of quality,” said Chris Baldwin, Director of Consumer Promotions and Loyalty at Sodexo Engage.
Rewarding loyalty, brand heritage and product quality are key drivers as to why customers return to certain brands.
Findings suggest technology providers and supermarkets reward loyalty more than any other industry. Samsung came top of its sector, scoring well on both high and consistent quality, despite issues with its faulty Galaxy phone.
Heinz is able to take advantage of brand heritage, with 76 per cent of users loyal to the brand for over 20 years.
In the battle of the brands, Coca-Cola failed to make it in to the top 50 index. However, Pepsi came in at number 33 on the list.
With the range of products greater than ever before, the pressure for brands to retain customer loyalty continues to grow. In a CX Network survey of over 700 customer experience practitioners, customer loyalty and retention topped the list of investment priorities for over a third of respondents. Furthermore, previous studies reveal it costs five times more to attract a new customer than to retain an existing one.
As brands moved into the digital era, new drivers in loyalty have emerged. Marko Hein, Senior Director, Digital Solutions at LEGO Systems, believes brand experiences are key drivers in creating loyalty in today’s digital world. “Loyalty is when a consumer has a strong affinity towards a brand or service. You can attain loyalty with an instant reward, but that goes away. You need to create real loyalty through the brand experience,” he says.
Victor Milligan, Chief Marketing Officer at Forrester, echoes these thoughts and suggests customers now like to participate in a brand and have moved away from old school loyalty methods such as coupons. “Loyalty moves towards experience and participation,” he explains.
However, these experiences must be personalised in order to ensure loyalty. As Ingrid Lindberg, Customer Experience Officer, Chief Customer, explains, “The biggest change in retail loyalty is the conversation about boomers vs. millennials. The boomer generation was content racking up points and miles and coupons, but this new generation is all about giving back – and loyalty can be tied to doing good.
"You can attain loyalty with an instant reward, but that goes away. You need to create real loyalty through the brand experience."
“If retailers want to continue to drive loyalty, they are going to have to create multi-layer loyalty programmes to appeal to all the different customers they have.”