Discover why 83% of customers feel undervalued by their favourite brands and learn how emotional connection, trust, and tailored experiences are the keys to building long-term brand loyalty among your audience.
Connection and loyalty are both fundamental to nurturing lifelong relationships between customers and brands. However, new research shows that there is an emotional disconnect happening. SAP Emarsys’ recent Customer Loyalty Index found that 83% of customers feel undervalued by the brands they are loyal to.
The report surveyed over 12,000 consumers from the UK, USA, Australia and Germany to find out what loyalty means to them and how brands can earn it.
While overall loyalty remains high, with 69% of consumers surveyed being loyal to certain brands, this overall figure is down by 10% compared to 2023. Across the generations, Millennials are most likely to display stronger brand loyalty, and Gen Z are less likely.
Key drivers for brand loyalty include high-quality products, creating memorable experiences, and brand longevity. Increasing prices, bad use of personal data, and a lack of human customer service support all have a negative impact on loyalty.
As consumer behaviour and habits evolve, the ways in which loyalty is displayed are also changing. The report by SAP Emarsys identified the five types of consumer loyalty, these are:
(image of incentives)
This type of loyalty incentivises customers with rewards or discounts to build instant loyalty.
Brands with a rich heritage or an affiliation with other long-standing brands can use this to develop Inherited Loyalty.
With Silent Loyalty, customers may appear loyal on the outside by demonstrating the key traits. However, they might not actively endorse or recommend a brand publicly if it doesn’t align with ethical or social values.
(image of ethical loyalty)
Brands that display strong values and have a voice on important issues can build Ethical Loyalty with customers if their values align.
This type of loyalty is undeniably what all brands are striving towards. Built through trust, love and devotion, True Loyalty is long-lasting and unwaverable.
While this type of loyalty is the holy grail for most brands and might seem hard to achieve, it’s actually the opposite. When compared to 2021, True Loyalty has increased by 26%.
These figures demonstrate a shift in consumer behaviour. Customers are no longer looking for just brand heritage and incentives to remain loyal. However, they are also looking to build stronger and more meaningful connections with the brands they buy from.
Building an emotional connection with your customer base should be a key pillar in your marketing efforts. In doing so, you can nurture lifelong customers who will choose your brand over your competitors time and time again.
Nikki, Client Director at Bonded, adds:
“A brand’s connection with their audience has never been more important, particularly as the market is oversaturated. New launches, challenger brands, celebrity collaborations – the choice for the consumer is vast. However, brands that invest their time in building trust and true loyalty with their audience over time should succeed. Old-fashioned word of mouth or client testimonials on your website are key to demonstrating your customers’ true loyalty to your brand, particularly in the eyes of Google and EEAT, and should form a key focus of your on-site strategy”.
With that in mind, let’s take a look at some key reasons why connecting with your customers emotionally is so important…
Studies show that it can cost five to seven times more to acquire a new customer than it does to retain an existing one. It’s not hard to see why – consumers, more often than not, will only buy from brands they trust. But building that trust costs time and money.
However, once this trust is built, you can reap the rewards. On average, repeat customers have a higher lifetime value than one-off purchase customers.
In today’s economic climate, consumers are more conscious than ever when choosing who to trust with their hard-earned cash. So, it’s not surprising to see that 57% of consumers now believe that high-quality products positively impact brand loyalty.
Many people live their lives by the phrase ‘money comes back, but memories don’t’. Over 20% of survey respondents said that memorable experiences drive loyalty. This echoes the sentiment that creating new experiences and memories is fundamental.
In today’s digital landscape, human connection is often overlooked with the rise of AI in customer service support. While some argue that this makes issues easier to resolve, the data suggests quite the contrary – with 23% of survey respondents saying that lack of human interaction negatively impacts brand loyalty. So, while it’s important to utilise technology, we must ensure we are also prioritising meaningful human interaction.
During the COVID-19 pandemic, consumers turned to shopping online as retailers closed their doors. Since then, brick-and-mortar sales have continued to decline as the convenience of online shopping reigns supreme.
Many may argue that brands don’t need a mobile app or a website. However, with 18% of app users saying they are more likely to love a brand with an app, the results speak for themselves. Not only can they create a personalised shopping experience, but they also make it easier for customers to stay connected with their favourite brands.
Mobile apps are also a great tool to drive deeper engagement. With a carefully considered omnichannel strategy, you can create a synergy between your marketing channels and build brand loyalty.
Building brand loyalty doesn’t need to be difficult. With investment in the right areas and connection at the heart of everything you do, you can attract an army of loyal customers.
With AI providing so much data, it’s important to use this to your advantage and create tailored customer experiences. Personalised content and offers are an instant loyalty builder, making your customers feel seen and heard.
The branding of Greggs is a great example of how you can create memorable experiences and drive loyalty. The beloved bakery chain teamed up with Fenwicks to create a unique culinary experience. Customers could enjoy their favourite bakes paired with champagne at their first-ever seated high-top bar.
While customers appreciate special offers and discount codes, this doesn’t mean they will re-engage with your brand. However, VIP experiences, loyalty points and personalised offers can create longer-term engagement.
A customer’s loyalty to a brand can often be tested when an issue arises. However, how you deal with these issues will decide the future fate of the relationship. It’s vital to continuously invest in customer service to ensure that all interactions are helpful and meaningful.
Connection has been and always will be the most powerful tool to drive long-term brand loyalty.
If you also feel that you are experiencing a disconnect with your customers, we can help. Get in touch with our expert team today, who can help you develop a connection-driven approach.
Sources
https://emarsys.com/learn/white-papers/customer-loyalty-index-2024-global/
