Managers must make their loyalty programmes more in sync with reality: survey
Companies risk draining profitability if they fail to alter course and allow their management teams to maximise the value of today’s most loyal customers
If you are trying to attract customers’ loyalty, make sure you get it right. Accenture Strategy’s latest Global Consumer Pulse Research, which surveyed 25,426 consumers globally, including 1,303 Chinese consumers, found that loyalty investments are simply missing the mark for many consumers today.
Seventy-five per cent of Chinese consumers say they are quicker to retract loyalty today compared to three years ago. Another 75 per cent have switched providers in the past year alone. Almost a quarter – 24 per cent – say their expectations around loyalty have completely changed, and just 77 per cent are spending more with the brands they love.
Furthermore, 32 per cent say they have a negative or non-existent reaction to companies trying to earn their loyalty today.
These findings suggest that as loyalty investments have grown, our understanding of how customers behave and how they view loyalty have not kept pace. It’s time for management teams to rethink loyalty and maximise the value of today’s most loyal customers. Without a course correction, companies risk draining profitability and pushing customers away.
Accenture Strategy’s research highlighted the other factors, beyond traditional loyalty mechanics such as good price and reliable service, which are influencing customer relationships and brand loyalty in the digital age. This “languages of loyalty” demonstrates the growing appetite among Chinese consumers for new product and service experiences, and the relationships they want and expect from brands and organisations today. They include:
● “Tokens of affection”: Sixty two per cent of Chinese consumers feel loyal to brands that present them with small tokens of affection, such as personalised discounts, gift cards and special offers to reward their loyalty.
● “Get to know me”: Sixty five per cent of Chinese consumers are loyal to brands that offer them the opportunity to personalise products to create something that is bespoke to them. About 69 per cent are loyal to brands that interact with them through their preferred channels of communication. Seventy three per cent feel loyal to brands that are there when they need them, but otherwise respect their time and leave them alone. Furthermore, 79 per cent are loyal to brands that safeguard and protect the privacy of their personal information.
● “Thrill seeker”: Sixty-three per cent of Chinese consumers are loyal to brands that actively engage them to help design or co-create products or services. Sixty five per cent are loyal to organisations that present them with new experiences, products or services. Furthermore, 64 per cent are loyal to brands that engage them in “multisensory” experiences, using new technologies such as virtual reality or augmented reality.
● “If you like it, I like it”: More than half of Chinese consumers are loyal to brands that partner with celebrities, and another 46 per cent feel loyal to organisations that partner with social influencers, such as bloggers and vloggers (video blogger). Sixty-three per cent are loyal to brands that their family and friends do business with. Furthermore, 61 per cent show loyalty to brands that actively support shared causes, such as charities or public campaigns.
● “Hook me up”: Sixty-four per cent of Chinese consumers feel loyal to brands that connect them with other providers, giving them the ability to exchange loyalty points or rewards. Likewise, 71 per cent are loyal to brands that keep them on the cutting edge by consistently offering the latest products and services.
Similarly, a 2015 Fjord study that looked at the mindset of customers globally found people want to feel delighted and proud of the experiences they have, but when the financial services tools at their discretion do not achieve this, they tend to be focused on efficiency and flexibility, which don’t tap into the same emotions.
The trick for Hong Kong banks and insurers trying to win brand allegiance will be to find a way to delight customers while simultaneously providing fast and smart services.
It’s evident that brands need to start thinking differently about loyalty today, specifically about the types of experiences their most profitable customers desire, which can help drive advocacy, retention and growth.
Consumer appetite for extraordinary, multisensory experiences and hyper-personalisation and co-creation opportunities will force brands and organisations to shift their approach and programmes. Doing so will ensure they achieve a new form of competitive advantage and a stronger understanding of what inspires loyalty among their customers, thereby justifying the massive investments being made on the promise of loyalty with business results to back them up.
Jin Yu is managing director of Accenture Strategy, Greater China