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What inspires consumers’ loyalty? How do organizations earn and keep customers’ loyalty? In this hyper competitive world, consumer and retail companies need to appeal to their customer’s hearts as well as their minds and wallets. KPMG’s survey of 18,520 consumers from more than 20 countries explores the truth about customer loyalty and how brands and retailers can attract and retain customer loyalty through enhancing customer loyalty programs. How do customers define loyalty?Customer loyalty is alive and well but digital disruption and new generational influences show that the nature of loyalty is changing. Overall, only 37 percent of respondents identified points and rewards as one of the most effective ways to secure their brand loyalty. In almost every country, points and rewards were less likely to earn loyalty than corporate transparency and honesty. Customer loyalty is too critical to be left to a customer loyalty program. When a customer is loyal to a brand: — 86 percent will recommend a company to friends and family — 66 percent are likely to write a positive online review after a good experience — 46 percent will remain loyal even after a bad experience  What inspires loyalty?Do their loyalty programs truly reflect what
matters most to their customers? The truth about customer loyalty survey, 74 percent of consumers said product quality inspired loyalty, 66 percent value for money and 56 percent customer service. Could it be that, as brands and retailers develop their customer loyalty propositions, they are making life too complicated for consumers — and for themselves? If you’re trying to build brand loyalty today, an emotional connection is no longer a nice-to-have, it’s a need-to-have. The paradox of personalizationThe industry consensus is that most consumers want personalization but this survey suggests that there is a gap between rhetoric and reality. Only one in five consumers globally saw personalization – be it in terms of service, communication, promotions and offers – as a leading benefit of loyalty programs. Truly personalized offers can cut through the clutter. In this context, relevance drives revenue. The value that consumers place on personalized offers from their loyalty programs varies by country. Although Europeans in Italy (20 percent), France (16 percent), Belgium (16 percent) and Spain (15 percent) were among the respondents most likely to value personalized offers, Germans were among the least likely, and likewise were the most likely (28 percent) to say that behavior tracking was a key deterrent to joining loyalty programs at all. The drive for personalization is likely to come into conflict with public concerns about — and regulators’ growing interest in — data privacy. Germany is not alone in their aversion to having purchase behavior tracked — this concern is also relatively high in mainland China and Hong Kong (23 and 29 percent), Canada, and the UK (both 20 percent). The truth about MillennialsMillennials — too often described as fickle, narcissistic or entitled — have been studied more intensely than any other previous generation. Yet the survey challenges many of these fashionable stereotypes. — More than six out of ten Millennials say they prefer to donate their loyalty rewards to a good cause than redeem them personally vs. 40 percent of Baby Boomers. — 69 percent of Millennials say loyalty programs are difficult to join and to earn rewards vs. 49 percent of Baby Boomers. — One in seven Millennials do not belong to any program. Of those who do, 81 percent say their membership increases their spend with the company concerned – compared to just 66 percent of Baby Boomers. Transparency, sustainability and innovation have a strong influence on loyalty, especially among Millennials and Generation Z consumers. These demographic groups are also more likely to be swayed by positive online reviews, influencers and social media. Millennials are seen as having a sense of entitlement but this is a misunderstanding. They like to use technology to do things ‘smart’ and this is now available, encouraging them to try out new things. Tom Herbert Four customer loyalty program enhancementsAccording to Paul Martin, Head of Retail, KPMG in the UK, there are five varieties of loyalty programs. All of these coexist in the consumer and retail sector, yet, for Martin, the direction of travel is clear: “If major brands and retailers are to successfully reinvent their loyalty schemes, they will want to be offering, directly or indirectly, privilege loyalty programs with personalized and customized offers.” About: Point-based loyalty reward cards, with point accummulation on every purchase. Pros for retailers: Access to purchase related data. Cons for retailers/customers: Low customer participation/retention - unused points act as liability for the retailers. About: Advanced loyalty reward cards, offering vouchers/coupons in addition to redeemable points. Pros for retailers: Enables cross-selling, product bundling - using insights derived from transactional data. Cons for retailers/customers: Unable to meet growing customer demand, who seek more value than just reward points or vouchers. About: Multi-brand, tier-based loyalty reward cards, with an option to use across multiple retail brands. Pros for retailers: Enhanced customer engagement - one card for a group of retailers. Cons for retailers/customers: Expensive scheme for retailers with little customer insight around each individual brand. About: Privilege loyalty program, with personalized and customized offers. Pros for retailers: Increased engagement - offers ecosystem of value, service and content; additional income as subscription fees. Cons for retailers/customers: No tier-based rewards; no single interface to access grocery shopping, video or music. About: Umbrella loyalty program, with enhanced convenience - everything under one ecosystem - along with rewards. Pros for retailers: Ability to offer integrated experiences between online and offline channels; tracks the entire consumer behavior inside the ecosystem. Cons for retailers/customers: Limited availability outside of China In The truth about customer loyalty survey, 96 percent of respondents agreed that customer loyalty programs can be improved and 75 percent of all consumers say they would switch brands for a better loyalty program. Those views and the fact that 59 percent of consumers who have signed up for loyalty programs do not use them to shop every week is vivid proof that brands and retailers have work to do when it comes to customer retention. Our survey data suggests that however brands and retailers refine their customer loyalty proposition, they should consider four factors in particular.
Loyalty programs need to be consistent, but we know that consumers like novelty. A good loyalty program can introduce new and different benefits that excite customers at a reasonable cost. Katherine Black
What is the importance of customers in the successful creation and delivery of service experiences?Effective customer participation can increase the likelihood of service delivery that their needs are met and that benefits the customer seeks are attained. Services such as health care, education, personal fitness, and weight loss, where the service outcome is highly dependent on the customers participation.
What are the benefits of customer participation in services?It gives your consumers a voice and helps create a reciprocal relationship between your brand and your consumers. In this way, consumers are truly dictating the direction your brand goes and actively contributing to the culture surrounding it, creating a more genuine and grassroots identity.
What is the important role played by customers Guests clients in the service industry?Customers as quality contributors to service delivery and satisfaction. Another role customers play in service delivery is that of the contributor to their own satisfaction and the ultimate quality of the services they receive.
What are the strategies for enhancing customer participation?4 ways to increase customer participation. Produce content they'll care about. Consumers are visiting your website or social media pages for specific reasons. ... . Engage your clientele. ... . Create a consumer community. ... . Embrace both the old and the new.. |
