Dive Brief:
- The share of customers feeling loyal to brands has slid since 2022, according to a survey of 4,000 U.S. consumers released by SAP Emarsys earlier this month. Seven in 10 customers say they are loyal to certain brands, retailers and stores, consistent with 2023 levels but down from 4 in 5 in 2022.
- Three in 5 consumers say they'll leave a brand over price, according to the survey. More than half, 56%, would depart due to perceived reductions in quality and 53% would leave because of bad experiences.
- Customers express loyalty to retailers in a variety of ways. The most common is by shopping frequently with favorite brands, followed by recommending the company to friends and family and downloading and installing their app.
Dive Insight:
Brands aiming to earn consumers’ loyalty may want to look above and beyond loyalty program basics.
While rewards are important — 7 in 10 survey respondents say rewards and incentives are a top prompt for using a brand’s mobile app — good, personalized experiences can keep customers coming back.
Consumers are becoming more likely to switch loyalty following a negative experience, according to Erin Raese, SVP of growth and strategy at Annex Cloud. Research from Qualtrics XM Institute backs that up: More than half of customers will cut spending with a brand after a bad experience.
Younger generations are switching brands due to boredom or sustainability issues, too.
“Against this backdrop, building lasting loyalty means creating tailored loyalty programs that engage, recognize and reward customers uniquely,” Raese said in a prepared statement. “Recognition is essential to foster loyalty, and is often more impactful than rewards, which are frequently equated with discounts in consumers' minds.”
Some brands find unique ways to recognize their loyal customers. PetSmart personalizes its loyalty program based on the customer’s pet, while Lowe’s offers MyLowe’s members personalized product information, maintenance suggestions and recommended subscriptions based on their recent purchases.
Good communication can help a loyalty app stand out. Half of customers will use an app more often if it has personalized communication, and another half would use it for helpful prompts like order updates and service delay notifications, according to SAP Emarsys.
Exclusivity can help loyalty programs stand out as well. Customers want exclusive rewards, such as special discounts or perks such as special merchandise, according to a June survey by Snappy.
One example is Ulta Beauty, which used exclusive and early event access and personalized offers to grow its loyalty program, according to a Q3 2024 earnings call earlier this month. The program reached 44.4 million active members during the quarter.
