Retailers Failing to Identify Most Loyal Customers

Paul AinsworthPaul AinsworthNovember 28, 20184min

Retailers do not know who their most loyal customers are and cannot therefore know if their loyalty strategies are inspiring prolonged customer advocacy, it has been revealed in a new study.

Research by Forrester Consulting on behalf of Collinson, has found that nearly two-thirds (65 percent) of retailers are not actively leveraging their loyalty programmes to know which customers are in fact brand advocates.

Surveying decision makers at organisations with revenues exceeding $300 million, the study also found that just over half (55 percent) of retailers track and analyse what happens when loyal customers interact with their brand, in order to improve the overall loyalty experience.

To support the improvement of loyalty initiatives, customer data is key. Yet almost two-thirds (64 percent) of marketing leads surveyed admit they only conduct loyalty-specific market research occasionally to help build a greater understanding of who their best customers are. This suggests that loyalty is taking a backseat for many retailers, with a third (33 percent) of brands saying that their loyalty programme does not cohesively span multiple functions in the business and it is not a top strategic initiative with C-level support.

In a separate body of research conducted by Censuswide for Collinson, which sought to investigate UK consumers’ experiences of loyalty programmes from retailers they are loyal to, it found corroborating evidence that loyalty schemes are not a top priority for brands. Of those British shoppers surveyed, just over a third (36 percent) said they were offered to create a customer profile when purchasing online, rather than check out as a guest.

What’s more, their preferred brands aren’t encouraging further interaction after purchase, as only a third (34 percent) said they are typically invited to join a loyalty programme to benefit from future offers or rewards when making a purchase. Forrester’s research for Collinson confirms this issue, as nearly a quarter (23 percent) of retailers state outright that they do not have a balanced benefits package that rewards, recognises or engages their customers.

These missed opportunities to develop relationships with customers should be a cause for concern among retailers. By collecting their data at key junctures, brands can know their customers better and promote loyalty on the individual’s terms.

Steve Grout, Director of Loyalty at Collinson, said: “We know that consumers’ expectations of retailers encouraging their loyalty often aren’t met. The retail landscape has shifted dramatically in recent years and it is simply not enough anymore to offer products that, by their own merit, keep customers coming back. More needs to be done to earn and retain customers’ loyalty by recognising their needs and rewarding them accordingly. Worryingly, however, it seems many brands haven’t been heeding the warning of the high street’s various struggling retailers.”


Paul Ainsworth

Paul Ainsworth

Experienced Irish journalist and former newspaper editor now helming executive editorial duties with Customer Experience Magazine, the UK's premier online source for Customer Experience news, features, and opinion, along with its sister site, CXM World.




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