Without Loyalty, You Won’t Accomplish Anything
That quote from controversial rapper and singer YoungBoy Never Broke Again sums it up for today’s marketers wanting to know everything they need about customer engagement and loyalty. Yet, according to private discount network company Access Development, American companies spend more than $180 billion annually in advertising compared to $2 billion on loyalty programs. Yet, the cost to attract new customers is much more expensive than the investment to retain and cultivate existing ones. Early consumer results coming out of the COVID-19 pandemic place an exclamation point on the importance of customer engagement and loyalty for future business sustainability.
A little more than 90% of consumers told marketing consulting company Yotpo they considered themselves the same or even more brand loyal than in 2018. Nearly 62% reported being loyal to one to five brands with 26% expressing loyalty to six to ten and nearly 6% between eleven to twenty brands. 59% said they were more than willing to recommend their brands to family and friends with an equal number reporting they would also join the loyalty program. Another 36% said they even spend more on their favorite brands. When asked to expand on their definition of loyal, 37% said they considered themselves loyal after five or more purchases. A third identified three purchases as their loyalty benchmark.
As consumers return to the new normal, many had earlier said they wish to continue receiving messages acknowledging the stress and challenges they had to deal with during the pandemic. That was the key finding of several surveys among all generations.
2019 survey results from Access Development also revealed some other things about loyalty and engagement that were important to consumers. Tops among them were offers and surprise gifts. 61% favored this. The second highest-rated response was a bit surprising. 50% of consumers favored a more convenient shopping process. Solving a problem or question ranked 45% among respondents. Other findings included companies recommending products based on customer need (27%), keeping customers updated on the latest products and news (23%), and welcoming customers on each visit (20%). A separate survey by digital marketing solutions firm Hello World reported that 9% of consumers felt engaging them on social media would boost their engagement and loyalty.
Why Rewards Are So Important to Loyalty
Incentives have high value. Wirecard, a financial commerce platform firm, dug a bit deeper on incentives and conducted a survey of consumers. 45% said brand incentives motivated them to make one to three additional purchases in the past year after receiving incentives. Another 22% made four to six purchases while 9% said they made seven to ten additional buys. Another interesting discovery by Wirecard was that 45% of respondents identified digital prepaid cards as their preference for receiving rewards. Regardless of the reward format, speed appears to be of essence. 39% expected to receive rewards within a day or less while 24% identified three days or less as being satisfactory.
The final findings by Wirecard also confirmed the power of rewards. 75% of customers said they were likely to make another purchase right after receiving an incentive. More than 50% said they would share their positive experience with others while another 35% said they would leave a positive review on the brand’s site. 15% went so far as to say they would post their reviews on social media.