Andrew Custage: [00:00:00] Hey everyone, hope you got your rewards card ready because we’re talking loyalty by the numbers.
We just conducted some interesting research on the topic of brand loyalty, and I’m really excited to be sharing some of these findings with my amazing colleague Stacy Park.
Stacie Parr: Hi, Andrew. Thanks for having me.
Andrew Custage: Are you excited to talk a little bit about some of our recent data on this topic?
Stacie Parr: Yes, I am.
Andrew Custage: So let’s begin with our rundown.
We recently surveyed 2000 global consumers to ask them questions about their most recent experience interacting with a brand. They’re general sentiments about loyalty and many other topics. All these findings can be found in our State and Brand Loyalty Report with a link down in the description. The first thing that came out of this study that I thought was really cool Was rethinking this idea of [00:01:00] the continuity or the, the gradient of where customers fall across being loyal or not loyal.
I would guess that a lot of brands probably plan their campaigns, their experiences, and many other endeavors around this idea that they have loyal customers and they have unloyal customers. But there’s really a lot more to it than just that. We’ve found that the majority of customers would consider the brand of their most recent interaction to be one that they have some feeling of loyalty to.
In fact, nearly three quarters feel this way. However, only about a quarter would say that they’re very loyal. A lot fall in this kind of slightly loyal or moderately loyal grouping, which really has a lot of implications about how brands should think about growing loyalty of their customer base and not.
Just saying that they’ve got one group of customers to go after and another where they can just rest on their loyals and think we’re good with these folks. We can count on them for the future. You know what I mean?
Stacie Parr: [00:02:00] Yeah, I think that makes a lot of sense. When I think about the brands that I interact with most, I feel like there are certain brands that I will go to first.
It doesn’t necessarily mean that’s where I’m going to actually make the purchase or book the reservation or take my car to be service, but I feel like I have a top tier of brands that I interact with. First and then kind of sub tier from there. So I guess that kind of falls in line with what you’re saying is kind of loyalty being on a, on a scale.
Andrew Custage: I love that point at especially this idea of loyalty doesn’t mean exclusivity too. Right. I think a lot of times there’s this assumption that if I have a loyal customer, they’re only going to me when they have a need that my brand can solve. But very often it’s really this idea that a customer can feel loyal to even more than one brand.
That’s something that we’ve seen come up, uh, several data points in this research. And also this idea that just because you feel loyal to a brand, it doesn’t mean that you also aren’t shopping very often with [00:03:00] competitors too. Another big finding from our research is in comparing the various attributes that a brand can compete on.
And understanding which one of them actually has the strongest relationship to a customer feeling loyal. And price we’ve found is very often a driver of brand selection. It makes sense, right? People are looking for the best deal, especially in this era of inflation and, uh, consumers budgets tightening.
But what really gets consumers to come back again or drive preference or loyalty We found is more often experience and experience has a stronger relationship to people feeling loyal.
Stacie Parr: There’s so many different data points where that experience happens. It’s not always like it used to be in person, in the store or at the hotel or wherever you are.
So there’s a lot more pieces of the puzzle.
Andrew Custage: And to that point that you’re making around that experience going across multiple [00:04:00] channels, it’s certainly multiple channels for commerce and browsing. Also, a really big thing is around this importance of having proper service across channels, too. One other really cool stat that came out of our research, too, is seeing this comparison of how much the customer intent to return can erode.
When a service interaction goes poorly, looking at consumers based on their most recent service interaction, if they gave that service interaction a high score, a 9 or a 10 on a 0 to 10 scale, meaning they were quite satisfied with it, in virtually no cases would they say that they planned to cease their relationship with the company going forward.
When you look though and compare it to consumers that had worsened experiences when they needed customer service, if they gave it a 7 or an 8, or if they gave it a 0 to 6 on that score, The proportion of customers that intend to abandon that brand forever afterwards, just dramatically skyrockets. In fact, it gets seven times worse as far as how likely they are to leave a brand [00:05:00] if their service interaction was a six or below, even compared to just a seven or an eight.
One of the things we did find in our research too, is how much of a driver loyalty can be based on a feeling that a brand cares about their employees. What I mean by that is the consumers. Say that it can make them feel loyal to a brand when they can tell that that brand treats its employees well, or that generally there is this care for the well being and career pacing and the many other things that would go into the employee experience, not just the customer experience.
That tends to translate well to consumers feeling the experience is better and feeling more loyal in return, too.
Stacie Parr: And then you get to see the same people over and over again, whether you’re going to for a hotel stay or you’re going into a store, you end up creating relationships with people that you see over and over again.
And I love that about brands. If someone reaches out to me to say, you know, something, something, Come in that they think I would like, or to remind me about a sale, you know, just like that personal touch. [00:06:00] So yeah, it makes me feel like they must be happy to work there. They continue to be there. And I feel like that employee experience that they’re having trickles down and then impacts my experience in a positive way.
Andrew Custage: Absolutely. So one other thing that I think is really cool too, is this observation we’ve had from the research of a misunderstanding of how secure. A relationship with a loyal customer is and it really requires brands to think closer going forward on if they are continuously delivering on the promise that consumers expect of them.
It’s sort of this idea of like, what have you done for me lately? Even if there’s a history, even if there’s been previous preference. We see that a lot of consumers actually can tell that brands might kind of count on the customer relationship a little too easily Maybe not giving as many deals or Exclusive perks as they used to.
We see 45 percent of consumers think that brands assume they have their loyalty [00:07:00] when they actually don’t and the consequence of that is Is when a bad experience occurs in that process, a consumer can be lost forever. And we see even the most recent poor experience is driving one in eight consumers to leave a brand forever.
Stacie Parr: That makes a lot of sense. I mean, I don’t think anyone can afford to sit back and just hope that people come back. You know, hope is not a strategy, right? So I think everybody has to put in the work to make the customers feel appreciated that they made the right decision with this purchase or this stay or this service.
Um, and so this, the stat does not surprise me at all.
Andrew Custage: And one of the things similar to this stat too, is we ask consumers, have you ever given a brand another chance? You’ve sworn them off after a bad experience. Have you ever gone back and what did they do to get you back? What we’ve seen is really a lot of the things that stand out the most or are cited most often Is that consumers need to be wooed back with heavy value incentives afterwards things like [00:08:00] discounts special offers lower prices In order to overcome a bad experience It seems often that you need to really just change the consumer’s mindset to get them to choose you based on low price alone Going forward and the costliness the profitability hit all of the things that come with that You It’s as if it would have been better to just invest proactively in delivering a good experience to begin with.
Stacie Parr: Oh, yeah, i’m sure bad news travels really fast right in this business and these industries and so I think combating that with some apologies and some Effort by the organization by the brand the company to try and make things better Can offset those negative stories that can impact the business negatively.
If I were to read a review of someone who didn’t have the best experience, yet they were impressed and pleased with the followup from the organization. I probably, I mean, I’m not one to write people off quite easily, but I probably would not hesitate to go to [00:09:00] that store or that brand and, you know, see what they, what they have to offer.
Mm
Andrew Custage: hmm. Absolutely.
Well, these findings and many others are available in our latest report, The State of Brand Loyalty, which you can access via a link below here in the description of this video. But before we finish, we’ve got time for our outlier alert.
This is a segment to talk about some findings that are especially interesting and maybe ones that even those that helped create this research weren’t expecting. One of the ones from this report that really stood out to me was this wildly high proportion of customers that can develop a feeling of loyalty after just one transaction.
I would have thought it would take 5, 10, you know, depending on the industry, it might be many times of being a repeat customer before you would consider yourself loyal. We’ve seen actually that [00:10:00] about half of first time customers develop some feeling of loyalty even just after one transaction. That’s wild to me.
Stacey, are there any situations where you would say, I am a loyal customer now and you’ve only transacted with a brand even once?
Stacie Parr: I mean, I can think about, um, one situation that might relate and that’s a, um, a healthcare experience where the first time I went to see a particular physician, I felt so well taken care of.
And at the end of the appointment, I said, can I please give you a hug? And we hugged and I feel like I’m never going to see another physician for this long. Again, like this is my girl. Like I’m for sure going to continue to go back to her.
Andrew Custage: I love that example, especially for an industry that is as personal as health care.
I feel like that, that first experience can make such a difference. And it also is one, it’s not like retail. It’s not like hospitality where you might be shopping around. If you know that you have the experience you were looking for with the professional that you trust. There is no reason to consider anybody else [00:11:00] after that, right?
I would
Stacie Parr: wait for an appointment with her before I went and tried to get an earlier appointment with a different physician in a different You know, medical group. And I know she’s reading notes about me before she comes in to see me, but I feel like she knows about me and that makes me feel well taken care of.
Andrew Custage: Another big outlier shocker was this finding of asking consumers and then cutting them up based on their age group to understand if they feel loyal or they feel like a forever customer. To one or more brands. We’ve actually seen that Gen Zers and Millennials are more embracing of this identity of being loyal to at least one brand than even older generations are.
Isn’t that kind of a surprise?
Stacie Parr: I am blown away by this. It just, it honestly doesn’t make sense. Cause I think about the, the text generation and the iPhone generation and how much they’re getting on their phone all the time through TikTok or Instagram or whatever else social media app that they might be on.
And it’s. So many [00:12:00] ads and so many of them are, you know, obscure, like very random, maybe don’t have a brick and mortar or don’t have a commercial, you know, everything, all of this advertising and client build base building is essentially through social media. So this really surprises me because I feel like they have so much at their fingertips that I think that they would be all over the place.
Andrew Custage: It’s a surprise to me too. And when looking at it a little bit further, I think something interesting that brands should be thinking about going forward, especially as they. Pursue a better relationship with Gen Z consumers is this idea that as you were mentioning with this constant stream of communication And interaction points based on social media and the many other channels that brands can reach consumers through today Younger consumers seem to be more embracing of this identity that they’re loyal to a brand, but it’s not exclusively one brand Remember we were talking about this idea of exclusivity Feeling loyal doesn’t mean in the eyes of most consumers that they’re never going to be shopping with competitors, too.
It’s this idea. I think that younger consumers [00:13:00] are recognizing that they have a relationship and they have a dialogue with a brand That evokes a feeling of loyalty, but it’s not an exclusive loyalty So it’s almost a table stakes type of environment of interacting with these younger consumers But it’s also not something that brands can be complacent with either and think because I have the dialogue with these younger consumers They’re always choosing me over competitors and very much might not be that case at all
Stacie Parr: And again, I think that kind of goes back to like the tiers of loyal of brands that you might be loyal to So you might have your first choices But that doesn’t mean you’re not gonna look down at other tiers as well to see like what might be available How fast can I get it here?
You know, who else is using it? Who recommends it? So I do. Yeah, that makes a ton of sense.
Andrew Custage: All right, Stacey, we’ve made it, we’ve covered our key findings, so now it’s time to round it off. Let’s do it. We talked about how loyalty is really more of a continuum as opposed to a binary loyal and [00:14:00] not loyal customer base. We talked about the role of experience and how it drives feelings of loyalty more than other brand attributes like price can.
And then we also talked about how loyalty can erode and even customers that have a strong relationship today can very easily abandon brands based on just one poor experience. If you’re interested in learning more, please check out the full report, The State of Brand Loyalty, with a link here in the description.
And we hope you join us next time. Have a good one.
