Rare: Redefining loyalty

Summer 2016

The Research

If true customer loyalty exists, why are there so many unused retail loyalty points on the high street? Redefining loyalty takes a look at the meaning of brand loyalty through the eyes of the customer. Within the research we ask customers what brand loyalty means to them and whether the industries current definitions of loyalty meets this expectation.

 
 

What is customer loyalty?

According to the Oxford Dictionary, the term loyalty is defined as ‘a strong feeling of support or allegiance’, ‘feeling’ being the key word. Yet in the marketing community when talking about customer loyalty the word ‘feeling’ is rarely discussed around the table. Often, when aiming to encourage loyalty, there’s a tendency to focus on points and prizes and the cards, apps and emails through which these are delivered.

In this report, we put the focus back on customer emotions and explore the drivers of true customer loyalty. These were our key findings:

  • Loyalty isn’t functional. While general purchases are driven by price (81%), quality (80%) and convenience (55%), loyalty is about likeability (86%) and trust (83%).
  • Loyalty is equal to favouritism. Like human relationships, it’s emotional and instinctive. When asked to name any brand to which they were loyal, 90% later named it as their favourite.
  • It’s all about trust. Consumers today care most about sharing personal values with brands, with trust coming out on top.
  • Marketers focus too much on tactics and overlook emotion. For loyalty mechanisms to work, a positive attitude must already exist. Marketers need to focus on gaining favouritism before investing in the mechanicsLoyalty schemes don’t drive loyalty. 65% of loyalty scheme members would still shop at the brand if the scheme ceased to exist.

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It’s time for a redefinition of what true loyalty means. It has become a label which is a substitute for things like repeat purchase, taking up of offers, high frequency of purchase, but it’s not the case, it’s so much more…
— Karl Havard, Partner at PA Consulting
Loyalty to an individual can be based on friendship and love. For customers, it’s about trust that you will provide a level of service, for example.
— Helen Tupper, Head of Marketing at Virgin Red
For different people it can be anything from buying into the mission of a particular brand, to the more basic auto-shopping out of convenience and habit.
— Lazar Dzamic, creative Strategist at google zoo

Found that interesting? Check out our other reports.