Banks and building societies leading the way in the battle for customer loyaltyby
Bankers may be public enemy number one, but banks and building societies are leading the way in the battle for customer loyalty, a new study has found.
A survey conducted by The Logic Group and Ipsos MORI, analysing how loyal consumers feel towards different sectors, founds that two-thirds of the general public saying that they feel loyal to a business or organisation operating in the banking sector.
Supermarkets and mobile phone companies were a close second, with 60 per cent and 52 per cent respectively of respondents saying they are a loyal customer. Meanwhile, half of the general public say the same of mobile phone companies with other sectors and just over one-in-ten said they felt loyal to Travel/Transport/Car hire/Airlines (13 per cent) or Hotels (11 per cent). Electrical/IT retailers (15 per cent) and Sports (gyms/sports clubs) (16 per cent) also record low levels of loyalty when we look at the population as a whole.
The survey of over 2,000 adults across Great Britain highlighted familiarity with both the in-store experience and value for money, and ease, whether that’s apathy or convenience as two key drivers of customer loyalty.
Antony Jones, CEO of customer interactions specialist The Logic Group, said: “Given the current climate, and consumer confidence in the economy taking a knock, it’s no surprise that customers have become wise over the past year. Many consumers now see loyalty as transactional rather than emotional; filtering many schemes with a ‘what’s in it for me?’ approach.”
The research also found that once people join a loyalty scheme, they are then more likely to join other schemes in the same sector and beyond. More than two thirds of people are members of supermarket loyalty schemes with over a third being members of two or three.
But Jones warned that the proliferation of loyalty programmes meant that onus was on businesses to identify and communicate the real USPs of their scheme. “The demands on loyalty schemes are clearly complex; balancing consumer expectations and motivations, against business purpose, and within a challenging economic context. But one thing clearly emerges from this year’s research: a loyalty scheme cannot simply be set up and left to run,” Jones said.
Simon Atkinson, Assistant Chief Executive at Ipsos MORI, said understanding customers, their behaviours, and what they want, was key to understanding ‘true loyalty’ to a brand, product or service. “Consumer loyalty is motivated by a range of factors including emotional brand affinity, familiarity, convenience and value for money. This varies considerably by sector.
“From personal experience, we know that we often keep ‘contracts’, written or otherwise, with companies out of general ease and convenience, rather than as a result of an emotional connection. Where there are barriers to switch, this results in a relatively low level of churn – though the company will be vulnerable to market disruption or aggressive new entrants, something we are seeing right now in the retail banking marketplace,” Atkinson added.