In a fickle, fast-moving retail environment, every brand could use a little loyalty—and in fact, new research asserts that loyalty might be worth even more than it appears at face value. A new study by Yes Marketing reveals that over half of consumers say they will pay more to buy from a retailer they’re loyal to—indicating a significant opportunity for brands to drive long-term revenue from their loyal customer base.
In The Retail Shopper’s Journey to Loyaltyreport, Yes surveyed over 1,000 retail shoppers to identify their priorities and motivations as they move along the customer journey, from initial interaction with a brand to brand loyalty. The report revealed that 41 percent of consumers rank product quality/value of products as the top reason they’re loyal to a retailer while 35 percent rank price highest.
The findings indicate that elements like free shipping perform well in driving purchases with new customers but are less influential for long-term loyalty. In fact, only 3 percent of shoppers ranked free or expedited shipping as the top driver of loyalty. On the other hand, 40 percent of consumers ranked it as the top convenience factor they consider before making a purchase with a new retailer. Marketers can leverage these findings to prioritize the benefits they communicate to customers at different points in their journey.
“The seamless and personalized consumer experience, which is a critical component of loyalty, has become table stakes,” said Jim Sturm, president of Yes Marketing, in a news release. “It takes so much more to deliver on the different expectations customers have for retailers at each stage of their journey. Smart brands must differentiate between effective acquisition tactics and effective loyalty strategies. This distinction can help brands increase lifetime customer value and create truly successful lifecycle programs.”
In terms of rewards, the report found that cash is king with 39 percent of consumers reporting that cash incentives make them feel most rewarded for their loyalty, followed by early access to products (23 percent) and exclusive promotions (18 percent).
“With the continuous evolution of the retail sector, retailers must build strong customer relationships to create lifetime loyalty and drive revenue,” said Michael Iaccarino, CEO and chairman of Infogroup, parent company of Yes Marketing, in the release. “Given the significant impact customer loyalty has on business results, retailers need to find a service and technology partner who can enhance and execute their marketing strategies to adapt to changing consumer expectations.”
Additional findings from the report include:
- Overall, 73 percent of consumers report that they feel adequately rewarded for their loyalty.
- Only 9 percent of consumers say points toward specific rewards is the top factor for feeling rewarded for their loyalty.
- Similarly, just 9 percent of consumers say free or expedited shipping is a top factor in making them feel rewarded for their loyalty while just 1 percent ranked access to exclusive events as their top choice.
- Memorable or exciting marketing communications, convenient returns options and social responsibility were the least influential loyalty drivers, with only 1 percent of consumers ranking these as the most influential factor in driving loyalty.