In today’s climate of economic uncertainty for companies and customers alike, brand loyalty is no longer a given. To stay with a brand, customers are demanding even more. It’s not just about better prices, they want experiences and connections.
In 2023, loyalty achieved through discounts and deals plummeted from 71% to just 51%, indicating that reduced prices wasn’t enough for retailers to sustain sales.
Brands have to showcase genuine customer-centric engagement if they are to build and retain loyalty.
Epsilon released its Customer Loyalty Index in March 2024, based on a study of over 2,000 UK consumers about their expectations of brands across four categories – fashion, electronics, grocery and banking. The index enables brands to understand underlying attitudes that predict and measure true customer loyalty over time.
Using data to personalise customer approaches
With purse strings tightening, it will take something special to keep consumers invested in a brand. Brands need to do to drive loyalty by leveraging data-driven insights to build creative, personalised strategies.
“Any brand able to combine personalisation and experiences can create ‘loyalty gold’,” Maria Giacobbe, SVP business development, Epsilon told CXM.
Utilising customer data becomes invaluable to show customers that their favourite brands care about their continued service.
For instance, a personalised email offering a special discount code because their birthday is coming up is the dedication and attention to detail that customers want to see.
Building emotional connections is key to keeping customers loyal. That requires “going beyond surface-level demographics to active listening to fully understand consumer passions, lifestyle and aspirations, and using it to find that shared sense of purpose to connect with them emotionally,” comments Giacobbe.
The index measures a key driver in impacting loyalty attitudes — share of heart. This explains the role of emotions and experiences to create compelling reasons for customers to return to brands.
The index found that companies don’t always need to rely on loyalty programmes to retain customers.
Going beyond loyalty programmes
The Customer Loyalty Index looked at how discount retailer Aldi performed in terms of consumer attitudes, and how it affected behaviour. It scored the highest for grocery, outperforming others by at least 12%, despite not having a loyalty programme in place.
Aldi succeeded because it has extremely strong fundamental loyalty drivers in place.
“For any brand, fundamental loyalty drivers like quality, price, and service must be on point,” Giacobbe explained.
Companies don’t need a specially tailored loyalty card programme and discount schemes to encourage loyalty. Customer loyalty has become more about building genuine experiences to keep consumers coming back for more.
If customers are committing themselves to a brand, they are expecting value and quality. Especially in a time of economic uncertainty, customers need a reason to spend their money.
“It’s clear that a one-size-fits-all approach doesn’t work anymore,” said Giacobbe.
“Consumers are looking for value from brands, but it’s becoming less about points and rewards and more about connecting with customers on an emotional level to win ‘share of heart’.
“Brands will need to see loyalty as an experience, not just a programme. This builds trust – and trust and emotional connections are key to building deeper relationships and loyalty,” she added.