Subpar customer loyalty? Here are a few things that might be going wrong.

Having been surrounded by uncertainty for the past 18 months, you might think that we’d be sticking to what we know

Well, it doesn’t look that way. McKinsey data tells us that almost three quarters of customers have changed stores, brands or the way they shop since the onset of the pandemic. People are brand swapping - and unfortunately for brand marketers, they’re doing it in their millions.

Why this shift you might ask? It could be down to many reasons – from boredom and having more time to research brands, services and products, to being squeezed for cash and needing to get a better deal. However, I’d bet that it’s partly down to the fact that the past year has really made us evaluate the kind of customers we want to be and the types of brands we want to shop with. The conclusions customers come to on this will, consciously or subconsciously, be swayed by how brands have communicated outwardly, or engaged with them personally, over the past year. Feel like your brand might be suffering from the rise in customers swapping? Here are a few things that might be going wrong.

#1 Your customer relationships are lacking the human element

Seemingly something the marketing community has circled around for the past decade, and a favourite discussion topic at many a conference. Yet, it still seems not all brands are quite there when it comes to humanising interactions with customers. Backing this up was our recent survey of over 2,000 consumers , which found 60% say bad interactions impact their loyalty to a brand and often result in them cutting ties. ‘Often’ feels to me like the operative word here. It seems that these bad interactions are common, not few and far between. The truth is, many customers want more from the brands they shop with. They want connections with human, empathetic brands that they can relate to and perhaps most importantly, trust.

The secret to fighting the wave of sub-standard customer interactions? Building genuine connections with customers through empathy, trust and personalisation. I know how difficult fostering a human relationship can be – particularly for large businesses with thousands, or even millions, of customers to serve. But there are ways to make simple changes to engagement strategies to make customers feel like more than a just number. From the small things such as admitting when you’ve made a mistake, acting on feedback, and stopping using automated messages, to the bigger, such as utilising data on their buying habits to implement bespoke, data-driven customer engagement and marketing campaigns that make them feel seen and valued.

Humanising the customer relationship will naturally not only lead to better all-round interactions, but also increased levels of trust. And when half of customers would pay a brand more for a product or service over their competitors if they trusted them, these small changes could lead to huge wins.

#2 Your customers aren't sure what you stand for

Another factor we’re seeing increasingly impact loyalty is the spotlight customers are putting on purpose, ethics and values. One-in-five respondents in our research admitted they want the brands they use to take an active stance on environmental issues, with a further one-in-five saying they would leave a brand completely if they engaged in unethical practices. The rise of online and social media has meant that company practices and values are under the spotlight more than ever, and as the digitally savvy Gen Z begin to rise through the spending ranks, the demand for brands to demonstrate what they stand for will only increase.

The challenge for brands here is this: one person’s closely held values could very well mean absolutely nothing to someone else. How do brands get around this? In my opinion, it’s simple: be led by your own values, not those of everyone else. If something isn’t genuinely integral to your values or what you do, just don’t do it.

Only by being genuine and truly taking an active stance on your purpose and values can brands build a true connection with customers. And if you’re reading this thinking, ‘I’m not actually sure of what our values are as a company,’ or equally ‘I know what our values are but I don’t feel like we practice them,’ it might be time to take a fresh look.

#3 Your customers don't feel it pays to be loyal

And last but not least, sounds simple but your customers might be ditching you for other brands simply because they feel it doesn’t pay to be loyal. Our latest research explored this and ranked the sectors consumers feel it pays to be loyal to:

1. Retail (supermarket)

2. Mobile provider

3. Food service and restaurants

4. Finance (banking)

5. Hotels and hospitality

6. Travel (airlines, trains)

7. Utilities (gas and electricity supply)

8. Insurance (home, car, life/health)

9. Telecoms (landline, at home broadband)

10. Media (streaming services – TV, music, entertainment etc.)

11. Retail (fashion)

12. Leisure (gyms, cinemas)

While this data no means provides a full picture, it’s certainly interesting to note those sectors that are currently performing well, and the ones that customers don’t feel there’s much point being loyal to. If you’re a supermarket or mobile phone provider, the good news is that many customers see the benefits of being loyal, so in your case it might be maintaining what you’re already doing, or adding to it gradually. On the other hand, fashion retailers and leisure providers have some more immediate work to do, so might want to think about shaking up their customer engagement strategies.

Making loyalty last

If I’ve learnt anything in my years as a customer engagement and loyalty specialist, it’s that loyalty is fragile. We know there are multiple factors impacting brand loyalty and many consumers are now very selective when it comes to who they shop with. While price and customer service have been key for some time, we’re now seeing factors like trust and aligning with brand values have a huge impact on how long a consumer sticks with a brand for. As the UK continues its better-than-expected economic recovery and consumers start spending again, for those brands that prioritise great connections and customer engagement, it’s possible that it could be a more lucrative year than expected. Who’d have thought?

By Michael Kalli, managing director at customer engagement, acquisition and loyalty specialists, Ello.

About Ello

Ello creates everlasting connections between brands and consumers by providing brands with the tools to give consumers genuinely rewarding acquisition, engagement and loyalty schemes. And in return, brands watch those consumers stick around.

It believes the most impactful programmes are the ones that feel like an extension of a brand, not a partner offer. With its home-grown products, expert services, nimble tech and experienced people, it does just that to achieve real commercial results, increasing acquisition and engagement for brands.

Already providing some of the UK’s most recognisable brands with sophisticated propositions, Ello’s capabilities are ever-growing to help more brands deliver incremental commercial revenue and delight consumers.

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