Brand loyalty: gone forever?
With the average person spending 8 hours and 21 minutes on their phones and laptops a day, it is no surprise that consumers are flooded with marketing constantly. Perhaps because of this, we have seen a rise of the ‘intelligent consumer’ – that is, consumers have become so used to offers, personalisation, marketing and advertising that they explore all the options for the best deal and leverage the accessibility of VIP treatment or rewards. So how can you foster brand loyalty in such a competitive age?
80% of your company’s future revenue will come from 20% of your current customers
There is $6.2 trillion globally in near-constant play due to consumers continually switching brands. Cultural shifts in attitudes to politics, religion, work and relationships mean that change is no longer something to be feared and exploring alternatives is hailed – “new is better than old / the grass is greener on the other side”. Building loyalty with just 5% more customers has been shown to lead to an average profit per customer of between 25% and 100% – however, this is easier said than done. Two thirds of consumers surveyed said that the number of companies or brands they consider when making purchase decisions has increased significantly compared with 10 years ago. Regardless of how many customers have signed up to your rewards scheme it doesn’t necessarily reflect retention rates, with the average number of loyalty cards per household lying between 20 and 30.
Failing to adapt is setting up to fail
Nowadays, personalisation has come to be the expectation, rather than a perk, so it is essential to go beyond the standard demographic or behavioural targeting in order to flourish in a crowded and competitive market.
In 2015, Forbes reported that approximately 15% of US shopping malls are half empty, and consumers now make more than half of all purchases online. This increase in online activity has unsurprisingly caused a huge surge in the amount of data being created. In 2013, the amount of data in the world totalled 4.4 Zettabytes, and with 2.5 billion gigabytes being produced daily, this amount is expected to reach a huge 180 Zettabytes by 2025. The undeniable shift in consumer behaviour has happened quickly, but it is absolutely necessary that businesses adapt to the digital age and leverage this data in order to survive and thrive. Currently only 0.5% of data is ever analysed and used, and businesses risk lagging behind or worse, failing, if they don’t start taking into account more when marketing.
The not-so mysterious case of Blockbuster
Once worth $5 Billion, Blockbuster was the industry leader in video rentals, but its reluctance to innovate in response to the evolving nature of the video-on-demand industry meant that it was forced to reduce its 9000 stores to just 50 by 2015, its demise simultaneous with Netflix’s rising success.
Old world vs. new world
The most successful B2C companies – including the likes of Netflix, Starbucks and Amazon – revolve their customer experiences around personalisation (tailored home pages, targeted product recommendations, bespoke offers and VIP rewards.) However, even these brands can improve their methods drastically by expanding the data points that they take into consideration. For example, personalising product recommendations based on past purchase behavior doesn’t take into account that certain items may be gifts, novelties, or jokes – such as a Manchester United pencil case for a nephew’s birthday when the customer actually supports Everton. Suggesting future purchases based on the incorrect presumption that your customer supports Manchester United could cost both loyalty and any future revenue from that customer.
With so much data available about any one consumer, you can truly understand their interests and hobbies rather than making presumptions based upon user behavior. This can be achieved though consent-based big data analytics tools which can analyse entire digital footprints to derive meaningful actionable insights in real-time.
Our multilingual solution PROFILE Personalisation enables you to truly tailor marketing and communications based on what your customer is actually interested in (do they like sport? Which sport? Which team?), their life events (have they just got married? Are they graduating soon?), their personality (do they like emotive messaging or lots of facts and figures?) and more. With PROFILE, you can identify the best time and way to contact to foster brand loyalty and increase revenue.