Customer loyalty is becoming harder for retailers to earn, and even harder to keep.
An Accenture survey of more than 5,800 consumers in 17 countries about their experiences with 10 industries found that only 20% of consumers feel loyal to the retailers they do business with. Overall, satisfaction was down in each of the 11 different categories of service that consumers were asked about in the Accenture Global Consumer Survey. From the innovation of technology to the volatility in prices to the evolution of store format, the challenges are building but show the immediate need for retailers to transform loyalty from beyond just rewards to a customized, two-way dialogue that reaches all parts of the customer experience.
Retailers and consumer goods companies start off at a disadvantage, as consumers find it inherently easier to switch stores and brands than to switch other service providers, such as insurers, banks or wireless companies. In fact, retailers experienced the highest rate of switching among service providers last year, with 17% of consumers saying they stopped doing business with a retailer altogether and switched to another.
While it is easy for customers to switch from one store or brand to another, retailers have historically experienced more success than other industries leveraging loyalty programs. The survey showed that participation in retail loyalty programs grew from 45% in 2009 to 52% in 2010, and the percentage of retail customers who were persuaded to remain a customer as a result of loyalty programs increased from 49% in 2009 to 54% in 2010.
Loyalty programs have become an essential tool for building and retaining consumer engagement with retailers. However, you cannot rely on loyalty programs alone. Loyalty is an outcome achieved when retailers deliver against customer expectations at each and every customer experience touchpoint; it’s not simply about the program.