Restaurants invest a lot in loyalty programs, but one massive study completed by operational strategy company, Accenture, says a lot of that money is wasted. Its data shows the programs often miss their mark, according to a news release.
The study — which gauged loyalty program experiences and attitudes of more than 25,000 consumer globally — took place this past July and August under the title of the Accenture Global Consumer Pulse Research. It was designed to identify the effects of current loyalty efforts in business worldwide, while also identifying factors influencing customer relationships and driving brand loyalty.
The results indicate that although more than 90 percent of all businesses worldwide invest in some kind of customer loyalty program, quite often their money is wasted on programs that don’t achieve their goals and sometimes even work against customer loyalty. Some of the most salient findings of the research include:
- Approximately 66 percent of consumers spend more money on brands they love, but at the moment 78 percent of those customers are switching their loyalties to other businesses and that same percentage of customers now say they switch loyalty much faster today than they did just three years ago.
- More than half of those polled, in fact, switched brands in the past year which is greater than the percentage that did so the previous year.
- A majority (81 percent) of consumers feel good about brands that get to know them and what they want, while 59 percent of consumers say small “tokens of affection” from brands, like personalized discounts and loyalty rewards increase their loyalty and 44 percent say “thrills,” like getting the chance to co-create products or services, enhance loyalty.
- Brand attempts to engage consumers’ loyalty actually turn off about 8 percent of consumers.
Aside from the company’s findings about the misalignment between loyalty efforts at businesses worldwide and customers, the research also identified what it called five “languages of loyalty” that provide companies some efforts that a proving motivational to customers when it comes to brand loyalty.
“New ‘languages of loyalty’ have emerged, driven by brands experimenting with creative digital experiences, which have changed the dynamics of customer loyalty today,” Accenture Strategy Senior Managing Director and Global Lead of Advanced Customer Strategy Robert Wollan said in a news release. “Every consumer has a natural instinct around what makes them ‘stick’ to a brand. The traditional ‘low price’ and ‘reliable service’ mechanics are no longer as effective at driving loyalty. With 66 percent of U.S. consumers spending more with the brands they love, organizations that stick to traditional approaches and don’t explore the new drivers influencing loyalty risk draining profitability and pushing customers away – even when they have the best intentions or are following their historical playbook. It’s time for organizations to take a fresh look at loyalty.”
Five new languages of loyalty
The company’s research indicates that in today’s market, the following approaches are proving particularly successful in enhancing consumers’ commitment to a brand, particularly among the millennial age-group.
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1. Use of small tokens of affection for customers, like personalized discounts and gift cards.
2. Your interest in them is important too and they want to know that you know them, with consumer allegiance strengthening for businesses that learn who individual customers are, what they like, as well as how and when to help them and when to leave them alone.
3. Experiences are important to them, so brands that offer loyal customers ways to engage in ‘multi-sensory’ experiences, with new technologies get consumer preference.
4. Their heroes and causes are magnetic, too. Brands that feature favorite celebrities, bloggers and causes gain customer loyalty.
5. Brand alliances that bring perks, also bring loyalty. So brands that can connect consumers with other brands and services they like by giving customers the ability to exchange loyalty points or rewards or stay on the cutting edge of their interests, also inspire loyalty.
“Organizations need to understand the loyalty languages of their most profitable customers and implement the optimal mix to ensure they’re delivering the experiences that drive advocacy, retention and growth,” Accenture Advanced Customer Strategy Managing Director Kevin Quiring, said in a news release. “An appetite for extra-ordinary, multi-sensory experiences, hyper-personalization and co-creation, are changing consumer dynamics around loyalty and forcing brands and organizations to shift their approaches and programs.”
The rewards for playing the loyalty game well
Accenture’s research also indicates that there are indeed, big pay-offs for businesses that can stay in the green zone with their loyalty efforts and customers. For instance, the study found that 55 percent of U.S. consumers said when they really feel loyalty to a brand, they urge family and friends to engage with the business as well. And just as significant is the fact that 43 percent of those polled in the study said they actually increase the money and time they spend with businesses they truly are committed customers to, proving there is definitely a “prize inside” for brands that execute engagement correctly with their customers.
Posted with permission from www.PizzaMarketplace.com
Photo Credit: iStock/ayo888
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