Customer loyalty crucial for brand success in 2024, new research suggests
Analyzing data from Marigold's 2024 Consumer Trends Index Report, Trent Lanning (senior researcher at Marigold) has spotted a clear theme: customer loyalty will be crucial for marketers to nail this year. Here's how to get it right.
The formula for good relationship marketing is pretty simple. Find your audience. Get to know them. Make them superfans.
Sounds easy. But for it to work, it’s important to remember the critical step of forging genuine connections with customers.
That’s going to become even more important in the year ahead. Google Chrome is finally delivering on its long-awaited promise to turn off third-party cookies, with a full phaseout expected by the end of 2024. What’s more, the 2024 political campaign season will crowd out most of the available retargeting ad inventory anyway.
But most importantly, consumer attitudes have evolved as well. And the key to establishing real relationships with customers requires meeting them where they are, both literally and figuratively.
To help brands understand both, we’ve released our annual 2024 Consumer Trends Index Report, a study designed to provide brands with actionable insights on consumer attitudes to help them develop more effective relationship marketing strategies.
It’s a big report with lots of data. But one consistent theme throughout is the importance of loyalty. Simply put, loyalty is the most powerful lever a brand can pull to retain customers.
Again, sounds easy. But digging deeper into the research shows some very clear lessons, trends, and opportunities for how to leverage this powerful tool in the year ahead.
The loyalty effect
How valuable is customer loyalty? Consider this: 50% of the consumers surveyed in our study report feeling pessimistic about the economy. Yet more than six in 10 (63%) say they will pay more to shop with the brands they’re loyal to.
That’s notable when put into the context of broader consumer trends. Impulse buying is waning, with 48% of consumers saying they’re doing more research before buying a product this year, compared to the 32% who are doing the same amount of research as they did the year before.
But don’t let the economic concerns fool you. Consumers are still looking to more than just price, with more than half citing product or service quality (69%) and convenience (59%) as factors more important than price when making purchase decisions, with sizable numbers (45%) mentioning customer service, too.
Quality. Convenience. Service. All are completely within your control as a brand, and all are foundational building blocks of customer satisfaction and loyalty.
Earning loyalty through personalization
Given all the sources of customer data that exist today, paired with the ability to mine and draw insights from that data, it’s almost hard to believe that more than half (51%) of consumers still report frustration over receiving irrelevant content or offers, according to this year’s CTI report.
Solving that problem stands to pay big dividends, as 85% of consumers say their favorite brand treats them like an individual, and 78% of consumers say they are likely to engage with a personalized offer tailored to their interests.
But providing personalization while respecting the privacy of consumers is a balancing act for brands. Insufficient consumer data, stored across multiple systems of record, will negatively impact the ability of brands to deliver experiences that are timely and relevant. But certain data practices – like the use of indirect tracking tools – can cause a backlash.
As noted at the outset, one of the primary sources of customer data is going away — third-party cookies. Compounding this is the growing privacy and anti-spam efforts by tech leaders like Google, Yahoo and Apple. Taken together, brands must fundamentally shift their attitudes and practices when it comes to collecting and using consumer data.
In a post-cookie world, where consumers, corporations and governments alike are placing heavier emphasis on data privacy, a more direct-to-consumer approach is necessary. That means collecting zero-party data from customers, provided through a meaningful value exchange, and then using that information to deliver thoughtful and personalized messaging.
Getting loyalty right
Brands with the highest rates of customer loyalty have several things in common: they deliver consistent experiences across channels, use personalized messaging, and reward customers for their loyalty.
When combined, these brand efforts are a great representation of relationship marketing in practice – a commitment to cultivating genuine connections, carried out by consistent, personalized messaging that makes customers feel like VIPs.
It’s a lot to manage. But when it results in loyal customers willing to pay more to shop with you, it’s worth the effort.
Here are some specific steps brands can take to keep customers loyal:
- Optimize your messaging to ensure your audience receives up-to-date, personalized information, such as triggered messages for product availability, personalized offers and promotions based on previous activity, and transparent explanations for how data is being used.
- When differentiating your brand from competitors, speak to these characteristics of your brand: the quality of your products or services, what sets your customer support and service apart, and the variety of products/services your brand offers.
- Make sure to continuously evaluate your loyalty programs for effectiveness and engagement. With 39% of consumers more likely to engage in a loyalty program this year compared to last, and 43% relying more on loyalty programs benefits, loyalty must be a daily activity, not a set-it-and-forget-it checkbox.
A quick note about loyalty programs. The best offer more than merely financial incentives. If all you focus on is the transaction, then all you’ll get is a transactional relationship in return. Our CTI report finds that a third of consumers find value in receiving exclusive access to products/events/services, while about a quarter find value in personalized product/service suggestions based on their loyalty program usage.
In short, offer more in your loyalty program and you’ll get more loyalty in return.
Brands have a lot of changes to navigate in the year ahead. New technologies. New policies. New challenges. But through it all, building relationships and cultivating customer loyalty remains a trusted constant that can act as a reliable North Star.
To best execute on the potential of loyalty, download the 2024 Consumer Trends Index Report for more details on consumer expectations, preferences, and limitations across formats, channels, and practices.
By Trent Lanning, senior researcher at Marigold