New research reveals that 61% of global consumers have left behind brands they were previously loyal to in order to save money. Despite this, 77% of shoppers around the world agreed that if a brand they felt loyal to continued to engage with them positively during an economic downturn, they would likely return to buying their products sooner. This is according to the Emarsys, an SAP Company, Customer Loyalty Index 2022, a study of 11,066 global consumers.
Now in its second year, the Customer Loyalty Index has been designed to help marketers demystify customer loyalty by tracking important drivers influencing a person’s allegiance to a brand. The Index identified five key loyalty types:
- Incentivized Loyalty – loyalty developed through discounts, incentives and rewards
- Inherited Loyalty – loyalty that’s built through association with other brands
- Silent Loyalty – customer loyalty without public advocacy or endorsement
- Ethical Loyalty – loyalty founded on emotional connections and shared values
- True Loyalty – every brand’s dream, unshakeable loyalty that’s build through brand love
While loyalty has increased globally with 76% of consumers around the world considering themselves loyal to one or more brand (an increase of 13% from 67% in 2021), this surge in loyalty has not been felt equally across the five loyalty types. Over the last 12 months, Incentivized Loyalty, Inherited Loyalty, and Ethical Loyalty have decreased 13%, 22%, and 26% respectively while Silent Loyalty and True Loyalty have largely remained the same, with Silent Loyalty decreasing slightly from 53% (2021) to 52% (2022) and True Loyalty staying put at 23% in both 2021 and 2022.
“In a time of economic turmoil and uncertainties, the drop in Incentivized Loyalty may come at a surprise, but this change attests to consumers becoming savvier about spending and increasingly selective about discounts. This trend reemphasizes the need for marketers to be consumer-centric and provide customers with the most timely and personalized discounts and messages,” notes Meghann York, Global Head of Product Marketing at Emarsys.
Beyond Product Selection & Pricing
While product selection (44%), discounts and rewards (39%), and consistently low prices (37%) remain the top reasons why consumers choose to stay loyal to brands, excellent customer service (36%), good returns policies (32%), personalized shopping experiences (31%), and frequent communication (28%) tread very closely behind. Similarly, when asked what a brand would have to do to lose their loyalty, 27% of respondents chose making the shopping experience difficult and 15% chose treating customers poorly (i.e. typically only offer discounts to new customers).
“Brands may not always have the ability to compete in terms of product variety and low prices, but they all have an opportunity to create a unique, customer-centric experience. As we know from the Emarsys Customer Loyalty Index research’s findings, this is an area where they can differentiate themselves beyond product selection and pricing, and strengthen consumer loyalty,” York continued.
Beyond price, the number one factor identified by consumers as most important to them when determining the best brands to buy, is Location—local vs. global brand (47%). This preference for “Made at home” versus “Made elsewhere” is consistent across all five countries where the Emarsys Customer Loyalty Index was conducted, with locals wanting to shop locally rather than import foreign-made products:
- 68% of US respondents say they are more likely to be loyal to US-made brands
- 57% of UK respondents say they are more likely to be loyal to UK-made brands
- 78% of Australian respondents say they are more likely to be loyal to Australian-made brands
- 64% of German respondents saying they are more likely to be loyal to German-made brands
- 65% of French respondents say they are more likely to be loyal to French-made brands
Industry also plays a role in consumer loyalty. According to the Emarsys Customer Loyalty Index, sectors driving the most consumer loyalty industries are:
- Clothing and fashion (55%)
- Food (55%)
- Beauty and skincare (37%)
- Technology (25%)
- Furniture/homeware (18%)
- Alcoholic drinks (18%)
- Food delivery (16%)
- Medicine/pharmaceuticals (15%)
- Automotives (13%)
- Airlines (12%)
- Energy (11%)
- Non-alcoholic drinks (10%)
“The Emarsys Customer Loyalty Index 2022 reminds us that loyalty is influenced by a variety of factors, some within our control, some outside of our control. The key thing for retailers to remember is to strive for building True Loyalty – that unshakeable, recession-proof loyalty. That will require marketers to be more proactive than ever before and create true, personalized customer experiences,” York concludes.
“It’s never been more crucial for brands to truly understand their customers: it’s not enough to be customer centric anymore, brands must be customer obsessed. To make themselves as recession-proof as possible, brands must know customers on a granular level and recognize which factors impact loyalty among different customer groups.
“The role of a marketer continues to evolve with technology-dominated responsibilities, and while this isn’t a bad thing for marketers, it places a greater emphasis in investing in marketing technologies in order to be able to engage anywhere, personalize everywhere and reach anyone.
“As such, having the relevant information to build a personalized customer story in one platform, utilising artificial intelligence and using the data you have available to build a clear customer profile will be key to unlocking customer behaviour. Having these insights will power the marketer to build a 1:1 relationship between the brand and customer and to reach the loyalty type that resonates most with the shopper.”