The loyalty of customers to brands is a familiar subject in the world of marketing – but less often discussed is how loyal marketers are to their customers. Do brands and their buyers see eye-to-eye when it comes to defining loyalty? Are brands rewarding their customers’ loyalty in the right ways? Can marketers truly understand the evolving needs of consumers?
These were the subjects of our recent research with the Data & Marketing Association (DMA), as part of their annual Customer Engagement report. Last week, on an unexpectedly snowy day in November, we were delighted to see our findings from this research unveiled at their Customer Engagement Conference 2024.
This is our second piece of research with the DMA, after we revealed last year that brands were trapped in a ‘price sensitivity cycle’. To cope with the cost-of-living crisis, brands used price promotions and offers to keep their customers coming back – but competitors did the same and prices were continually cut, all while consumers became more and more price sensitive. As recommended in the DMA’s 2023 report, “How to Win Back Customers and Rebuild Loyalty”, the way out of this cycle was longer-term strategies focused on brand building and customer experience.
Our recent research, “How Loyal are Marketers to their Customers?”, shows that the nation’s mood has since slowly improved, with a renewed sense of optimism and lower price sensitivity among consumers. Loyalty is on the rise, but this makes it all the more important that marketers understand loyalty from their buyers’ point of view.
There’s currently a disconnect between marketers and consumers. For marketers, loyalty is tied to brand advocacy: their ideal consumer engages with the brand through social media and recommends it to others. This kind of loyalty could do well in the face of future economic crises, but it differs considerably from the view of consumers (especially over-35s), whose definitions of loyalty are more practical and focused on traditional loyalty programs.
Fortunately, our research offers insights into how marketers can better align their view of loyalty with what consumers want. Brands shouldn’t lose sight of practical features (such as the quality and reliability of products), but good customer service and brand charisma are important too. Consumers favour owned channels – like email and websites – for their sense of direct connection with brands, and while social media has a role in reaching under-35s, traditional channels like TV remain essential. Finally, rewards are key to getting loyalty right, but marketers need to better differentiate between ‘rewards’ and basic hygiene factors. As with loyalty itself, brands must consider whether what they’re using to thank buyers is really seen as a ‘reward’ at all.
When it comes to loyalty, striking the right balance between short-term wins and long-term gains is crucial. Focusing heavily on consistent purchases is great for the bottom line, however it hardly helps to foster deeper, more emotional relationships with buyers. If marketers are to sustain the recent growth in loyalty, they first need to understand what loyalty really means for their customers.
You can find out more and access the report here. Or get in touch with Amy and Luke if you’d like to discuss the findings in more detail.