The difficult economy of the last four years has given rise to what John Worley, director of customer interactions for The Logic Group, Fleet, UK, calls “the promiscuous consumer.”
“The definition of customer loyalty has undergone a fundamental change in the past four years of economic uncertainty, and the Internet has necessitated a rethink of customer engagement strategies,” Worley said. “Promiscuity on part of the consumer is a reflection of the perceived value of their interaction with merchants and brands. Consumers want more bang for their buck.”
As a result, consumers have become more involved with voucher (“daily deal”) sites that offer steep discounts, Worley told Loyalty 360 today. As a result retailers who want to gain loyalty from this consumer need to ensure that they are driving value from their offerings.
“They need to understand consumer needs and deliver on those broad needs,” Worley said. “The joke over here (in the U.K.) is that you can’t get a pizza without joining a loyalty program. Retailers have to make sure that they are delivering the best price whenever they can. They need to create a dialogue with the consumer rather than constantly having to offer the lowest price. They need to have ongoing communication with the customer and make sure that the communication delivers the value of the brand to the customer.”
Worley said the above strategies all rely on use and analysis of customer information, highlighting the increasing importance of using data to help drive customer loyalty.
The Logic Group and Ipsos Mori have been monitoring consumer loyalty trends in Britain over the four years since 2009. The compiled research has found that:
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Today, consumers want instant rewards, and (42 percent) prefer to receive offers when they shop – with more than a third of consumers (37 percent) happy to receive general offers rather than rewards.
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Over three quarters of consumers subscribe to loyalty programs.
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The uptake of additional loyalty programs among existing members has been strongest for online voucher discount organizations (consumers are members of almost two programs on average), although satisfaction with these types of schemes is amongst the lowest.
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For four years in a row since 2009, British consumers have expressed a feeling of loyalty to their banks/building societies and to supermarkets.
Technology is another important tool for companies seeking to enhance customer loyalty, according to Worley.
In 2009, more than 50 percent of UK consumers were not online customer of any business. Today, online shopping is more popular in the UK than in any other country in the world, with British consumers now spending an average of $1,718 (£1,083) a year (according to data from Ofcom). Nearly one in six (16 percent) of Brits admit to openly using their mobile phone to check product details, prices and reviews while shopping in-store, according to Worley. One in ten consumers has requested loyalty offers on their mobile phones, and over one in ten have received them on their devices.
According to The Logic Group, over one-fifth (22 percent) of British consumers visited the Facebook site of a company to which they are loyal, while only 8 percent have followed a company they feel loyal to on Twitter. Just under a tenth (9 percent) of adults in Britain have received a loyalty offer via a social networking site.
“The rapid proliferation of mobile technology and digital social communications will play an important part in the multichannel customer engagement strategies in 2013,” Jon Worley said. “Today, consumers place maximum emphasis on ‘honesty and integrity’ when judging a company’s reputation. Merchants should integrate mobile and social communications channels to understand their customers better and to encourage a favorable reputation through tailored engagement.”