Every Agency Needs to Obsess About Loyalty

The company, Access Development, tracked and recorded, and recently shared every publicly available piece of data available concerning customer engagement and loyalty. They call it the Ultimate Collection of Loyalty Statistics. These data points, insights and themes are interesting unto themselves but add up to one big fat fact they did not note…any marketing business is in the business of loyalty.

I mean advertising agencies, marketing consultancies, public relations firms, market research bureaus, digital agencies, performance marketing shops, telemarketers, brand consultancies, social media marketers, media buying services, promotional material providers, influencer and celebrity marketing 200464106-001advisors…well, you get the idea. Any agency, firm or service that is in the business of marketing exists for one purpose. Of course, this includes those prescient to be specifically in the business of loyalty marketing.

The past, present and future of marketing has and will always hinge on loyalty. No company wants a one-time customer. Even businesses selling bomb shelters in the 1950’s wanted a client’s second home or to upgrade the first. Apple wants to sell customers a new cellphone every time there is a new release or every 22 months which is the smartphone adoption average.

Agencies and consultancies continue to talk about brand positioning, awareness, consideration and trial. Important stuff for sure but only the start. All efforts and spend should have loyalty as the end goal. Anything else is a dodge, a feint, a run from the real focus and fight.

Not one single advertising agency, brand consultancy, PR firm, media buyer is really talking about loyalty.

I see not one single advertising agency, brand consultancy, PR firm, media buyer talking about loyalty. This leads to churn, inefficiency, ineffectiveness and the regurgitation of the same ideas whose only result is a client’s frustration and dissatisfaction…and poor results.

Why spend money on branding and advertising if not to have repeat customers?

Let me say it again, no company wants a one-time customer. That is why marketing’s purpose is loyalty. You only need to give a cursory examination of Access Development’s aggregation to arrive at the same conclusion. We thank them for the following…and for also proving loyalty programs are a tactic not a strategy.

1. Brand loyalty is on the decline

Just 25% of US consumers consider brand loyalty as something that impacts their buying behavior. (Ernst & Young)
Only 27% of consumers see brand loyalty as important. (The Marketing Store)
28% of consumers are loyal to their providers and brands. (Accenture)
78% of consumers are not loyal to a particular brand. (Nielsen)

imageThere is a temptation to pin this on the economy or the wide adoption of ecommerce. There’s even a temptation to lay the blame on Millennials, who are notoriously fidgety with brands (unless you ask them)…

44% of Millennials say they are loyal to brands they buy, and 52% will choose quality over price. (IRI)
60% of Millennials said that they are often or always loyal to brands that they currently purchase. (Elite Daily)
55% of Millennials claim to be more brand loyal today, compared to 39% of consumers in the 35-and-older group. (Marketing Executives Networking Group)

2. There isn’t much consensus on what inspires brand loyalty

52% of consumers have switched providers in the past year due to poor customer service. (Accenture)
15% of shoppers would give a brand or product a second chance after a poor experience. (InReality)
73% of consumers cite price and value as the leading factor that determined brand loyalty. (Support.com)
49% of consumers will gladly switch brands for a coupon. (GfK)
37% of consumers who ended a business relationship did so because they were frustrated with the IVR. (24/7)
73% of Millennials are willing to pay extra for products and services from companies dedicated to social and environmental change. (Nielsen)
Top three reasons consumers switch brands: cheaper pricing (31%), rude staff (18%), and too many mistakes (16%). (Verint)
97% of consumers said they are somewhat likely to become more loyal to a company that implements their feedback. (Apptentive)

3. Loyalty programs are on the rise—sort of

There are 3.3 billion loyalty program memberships in the US, an average of 29 per household. (Colloquy)
Consumers belong to an average of 13.4 loyalty programs. (Bond)
83% of consumers say they belong to a loyalty program. (DailyBreak)
75% belong to up to 10 loyalty programs. (Cognizant)
American consumers are members of 10 loyalty programs on average. (The Marketing Store)image
87% of consumers want a customer loyalty program. (Talech)
89% of shoppers currently participate in some type of loyalty/reward program. (General Mills)
69% of Millennials belong to a retail loyalty program. (Blackhawk Network)

People love the idea that every dollar they spend with a brand is building up to some sort of reward. Of course, their enthusiasm and willingness to sign up is quickly dampened… Most research shows that people are active in less than half of the programs they’ve joined:

Of the total membership in loyalty programs, 58% don’t actively participate in those memberships. (Colloquy)
Despite the increase in average enrollments, the average number of programs in which members are active has decreased from 7.8 to 6.7. (Bond)
The average household in the US actively uses 44% of enrolled loyalty programs. (Capgemini)
35% of points program members redeem awards. (Forrester)
Over 20% of loyalty program members have never made a redemption. (Bond)

 

 

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