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Advocacy versus apathy: Generating customer loyalty in an age of promiscuity

Advocacy versus apathy:
Generating customer loyalty in an age of promiscuity

By Sarah Jenkins (Director, Magenta) and Bryan Roberts (Global Insight Director, TCC Global)

 

A decade ago, consumer behaviour was often driven by loyalty schemes. Customers would go out of their way to collect points to convert to rewards of their choice. In exchange, retailers captured highly valuable information about what consumers are buying, when, and how frequently, enabling them to plan the future of their business confidently. However, as the number of loyalty schemes has increased, and the appeal of rewards offered to consumers has been diluted, retail loyalty schemes are no longer strong enough to drive shopper behaviour.   From a survey undertaken for TCC, we know that if a store stopped their loyalty scheme, it would be a genuine issue for only 5% of customers who would proactively look to shop elsewhere. Looking in detail at shopper trends, and the rise of the discount retailers, we might therefore be forgiven for thinking loyalty is dead.

There are two types of shoppers: transactional and emotional. Transactional shoppers can be easily captured through the opening of a new store, a desirable price-led campaign or a loyalty scheme. However, the lack of emotional connection means they will easily be turned again when a different retailer does something to catch their eye.  Shoppers with an emotional connection to the retailer are much more likely to be a genuinely loyal customer.

From speaking with mums and kids globally, we sort to understand what loyalty looks like today. We have identified the issues that are important to shoppers and key areas where retailers have a genuine opportunity to reengage with consumers:

 

  1. Money off is welcome but it is not the sole driver of loyalty
  2. Customers want to be rewarded with enablers of family time
  3. Consumers need help to make healthier choices
  4. Brand values matter

 

It’s in these four areas that retailers and brands have a genuine opportunity to re-establish customer loyalty. Making a public commitment to share responsibility for these issues will make consumers listen. Choosing brands with the same social values as them is becoming increasingly important to consumers.  From the work we’ve done and from what we’ve seen in retail data, we’ve learned that consumers who have an emotional connection with a brand will go out of their way to engage with it.

Understanding these issues, and being confident in knowing what drives genuine loyalty, has resulted in a step change in the way TCC talks internally about shoppers; and elevated relationships with clients externally. This understanding has resulted in new relationships and large nationwide campaigns through retailers that TCC has been wanting to work with for a long time.

Furthermore, these qualitative insights into mums and kids have enabled TCC to construct more powerful rewards and campaigns for retailers, driving an enhanced commercial performance and improved brand advocacy.