Accenture Strategy’s just-released 2017 Global Consumer Pulse Research finds marketers and companies are wasting billions on customer loyalty programs that don’t deliver like they use to.
In July-August 2016, Accenture surveyed 25,426 consumers in 33 countries to gain a better understanding of their buying preferences, attitudes and behaviors. The survey collected and analyzed responses from the largest sample of consumers in the 11 years of Accenture’s conducting this research.
No doubt inspired by releasing the report on Valentine’s Day, the researchers put the brand loyalty status in terms of relationships — and it’s not all lovey-dovey, as long as companies don’t understand the way to customers’ hearts (and they won’t be swayed by sweet talk and cheap promises).
The report, titled “Seeing beyond the loyalty illusion: it’s time you invest more wisely,” includes data from 2,532 US consumers about their loyalty relationship with organizations and brands. The study found that 78% of US consumers are switching providers at “profit-crushing rates,” and 66% spend more with “the brands they love.” And that’s just US consumers.
According to the report, talk is cheap as traditional “low price” and “reliable service” mechanics are no longer as effective at driving loyalty, and organizations that don’t explore the new drivers influencing loyalty risk draining profitability and pushing customers away. “It’s time for organizations to take a fresh look at loyalty.”
“New ‘languages of loyalty’ have emerged, driven by brands experimenting with creative digital experiences, which have changed the dynamics of customer loyalty today,” said Robert Wollan, senior managing director, global lead of Advanced Customer Strategy at Accenture Strategy, in a press release.
The report identifies five languages of loyalty that are driving customer relationships in the digital age — just to look at US millennials:
- * Tokens of affection: 59% of consumers are loyal to brands that present them with small “tokens of affection” such as personalized discounts, gift cards and special offers to reward their loyalty.
- * Get to know me: 41% of consumers are loyal to brands that let them create bespoke items; 81% want brands to get to know them—understanding when they need them, and leaving them alone when they don’t.
- * Thrill seeker: 44% of consumers are seeking thrills like the opportunity to design or co-create products or services; 33% are loyal to brands that engage them with new technology such as virtual reality and augmented reality.
- * If you like it, I like it: 42% are loyal to brands that their family and friends do business with; 23% are loyal to brands that partner with celebrities and influencers; 37%are loyal to brands that actively support shared causes.
- * Hook me up: 51% are loyal to brands that keep them on the cutting edge by consistently offering the latest products and services; 31% are loyal to brands that connect them with other providers, giving them the ability to exchange loyalty points or rewards.
The bottom line: Organizations are wasting billions of dollars on customer loyalty programs that don’t work. It’s time to pay attention to the new factors driving loyalty.
“Organizations need to understand the loyalty languages of their most profitable customers and implement the optimal mix to ensure they’re delivering the experiences that drive advocacy, retention and growth,” said Kevin Quiring, managing director, Advanced Customer Strategy, Accenture Strategy, in the press release.
The report also found that 8% of US consumers have a negative reaction when brands try to earn their loyalty, while 26% think brands should do everything possible to earn their loyalty.
In addition, 43% increase the level of business they do with the brands they love and 55% express loyalty by recommending the brands and companies they love to family and friends.
Below, more fresh intel from Accenture of interest to brand marketers followed by the full infographic for this report: