Personalization drives brand loyalty—but brands are missing opportunities to engage

by | Aug 24, 2020 | Public Relations

Comms pros know that personalization is driving brand loyalty today, but new research from AI-driven 1:1 marketing firm Formation.ai finds that consumers feel brands aren’t doing enough to recognize them as individuals.

The firm’s latest study, Brand Loyalty 2020: The Need for Hyper-Individualization, comprises survey responses from 2,000 consumers and shows the more personalization tactics a brand uses, the more loyal a consumer is to that brand. It also reveals consumers engage most with brands they feel recognize them as being unique—meaning true one-to-one personalization is critical to earning consumer loyalty and higher brand engagement in a crowded market.

Personalization drives brand loyalty—but brands are missing opportunities to engage

“Consumer loyalty has risen to new heights in the last five years, but it hasn’t been a boon for every brand,” said Christian Selchau-Hansen, Formation.ai co-founder and CEO, in a news release. “Garnering loyalty is increasingly difficult, especially with the economic uncertainty brought on by COVID-19. The need for brands to deliver real value has become more dire as shoppers evaluate purchasing decisions against personal safety and tighter household budgets.”

Personalization drives brand loyalty—but brands are missing opportunities to engage

The study includes a trove of consumer insights for brands and marketers seeking to grow their business by building and strengthening individual customer relationships through personalized experiences. Key findings include:

Basic customization and segmentation tactics are no longer enough

Seventy-five percent of consumers said the marketing emails they open frequently contain macro-segmentation and/or micro-segmentation tactics, indicating these are now table stakes.

Consumers want true one-to-one personalization

Eighty-one percent of consumers are willing to share basic personal information in exchange for a more personalized experience, and 73 percent said the brands they engage with the most recognize them on a one-to-one level.

Loyalty programs are key to greater personalization

Seventy-nine percent of consumers agree that the more personalization tactics a brand uses, the more loyal they are to that brand, and 73 percent said they’re more likely to engage with a brand that offers a loyalty program versus one that doesn’t.

Loyalty programs must stand out

Fifty-eight percent of consumers said they’re more loyal to brands than they were five years ago, but the majority of respondents (63 percent) only belong to between one and three loyalty programs, meaning a program must deliver exceptional experiences to make the cut. Additionally, 77 percent of consumers feel brands could be doing more to earn their loyalty.

The data, collected just prior to the declaration of the COVID-19 pandemic, has become more resonant in recent months.

Personalization drives brand loyalty—but brands are missing opportunities to engage

“The bar for creating consumer relevance has risen dramatically as tech giants like Netflix, Amazon and Spotify deliver increasingly personalized user experiences,” Selchau-Hansen said. “Consumer expectations for individualized experiences are rising, and the pandemic is accelerating that. If brands want to foster loyalty from today’s consumer, they must deliver experiences and communications so tailored they feel as if they’ve been crafted for just that one person.”

Download the full report here.

Personalization drives brand loyalty—but brands are missing opportunities to engage

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

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