Loyalty Programs Boost Customer Retention
Loyalty programs and purchase incentives are more likely to improve customer retention for retailers, a study by Nielsen (NYSE:NLSN) revealed. 84% of more than 29,000 Internet respondents in 58 countries said they were more likely to visit retailers who offer such incentives.
According to the survey, discounted or free products are the most valuable loyalty program benefit, with over 75% of global respondents agreeing. Customer service and free shipping incentives are important to less than 45% of the participants. When it comes to pricing, 41% of respondents said they were most likely to switch brands if they are offered a better price. Quality matters only for 26%, followed by a better service agreement (15%), better selection (10%) and better features (8%).
“While the concept of loyalty is nothing new, we are seeing a significant surge in retailers—and particularly those in developing economies—investing in loyalty programs that give them valuable insight into how to better meet customer needs,” said Julie Currie, senior vice president, Global Loyalty, Nielsen. “Savvy retailers are mining the data and looking for new and innovative ways to achieve the benefits most important to their customers.”
When it comes to loyalty sentiment, mobile phones score higher than food and beverages, with 24% of global respondents claiming complete loyalty to mobile brands and service providers. By comparison, 40% of consumers declared they were not loyal to food and beverage brands, and very likely to switch when offered better deals.
More details and additional survey data are available via Nielsen Survey: 84 Percent of Global Respondents More Likely to Visit Retailers That Offer a Loyalty Program.