Earning Customers’ Loyalty Can Pay Dividends
The value of loyal customers who stick with a business has long been evident. New data from Yes Marketing reinforces the conventional wisdom that shows customer loyalty can bring greater revenues as well. Research by the marketing services firm found that more than half of consumers will pay more to buy from a company that has earned their loyalty.
“The seamless and personalized consumer experience, which is a critical component of loyalty, has become table stakes,” says Jim Sturm, president of Yes Marketing. “It takes so much more to deliver on the different expectations customers have for retailers at each stage of their journey. Smart brands must differentiate between effective acquisition tactics and effective loyalty strategies. This distinction can help brands increase lifetime customer value and create truly successful lifecycle programs.”
Yes Marketing surveyed more than 1,000 retail shoppers for its “The Retail Shopper’s Journey To Loyalty” report and found that 41 percent of consumers rank product quality/value of products as the top reason they’re loyal to a retailer, while 35 percent rank price as the highest. The findings also indicate that elements like free shipping perform well in driving purchases with new customers but are less influential for long-term loyalty, and, in fact, only three percent of shoppers ranked free or expedited shipping as the top driver of loyalty.
In terms of rewards, the report found that cash is king with 39 percent of consumers reporting that cash incentives make them feel most rewarded for their loyalty, followed by early access to products (23 percent) and exclusive promotions (18 percent). Memorable or exciting marketing communications, convenient return options and social responsibility were the least influential loyalty drivers, with only one percent of consumers ranking these as the most influential factor in driving loyalty.
“With the continuous evolution of the retail sector, retailers must build strong customer relationships to create lifetime loyalty and drive revenue,” says Michael Iaccarino, CEO and chairman of Infogroup, parent company of Yes Marketing. “Given the significant impact customer loyalty has on business results, retailers need to find a service and technology partner who can enhance and execute their marketing strategies to adapt to changing consumer expectations.”