Loyalty’s love triangle: quality, price and customer service

Coining the term “Experience Economy”, marketers are keen to showcase a unique occasion with a brand as the essence of what makes their product or service stand out from the crowd.

However, the research we conducted for our latest report into the effectiveness of loyalty schemes, Loyalty 2020, has uncovered the real reasons why customers remain faithful to a brand - and experience is only one small entry on a longer list.

In previous studies, we established that the main factor underpinning customer loyalty is trust. Seeking to understand more about what consumers mean by this, we polled a 1,000-strong, UK-representative panel with a new survey. We also asked them what makes them more loyal in five focus sectors: fashion, gyms, holidays, restaurants and on-demand entertainment.

Across all five sectors, quality of product is the bedrock of trust, and diminished quality will therefore lead to loss of trust in a brand. Quality was the most important factor behind trust in restaurants (39%) and fashion (37%); there was equal ranking for holidays, on-demand services and gyms (16% each).

The second-most relevant feature was price. This was highest for on-demand services (28%), where competitor offers and availability of content are key. It was also the biggest factor in gyms (21%).

There was less of a price focus from consumers of fashion brands (14%) and holidays (13%), while - perhaps surprisingly - just 2% rated cost the most important factor in choosing a restaurant.

Customer service comes into play as the third crucial factor in building and maintaining trust. It was deemed most important in restaurants (34%), holidays (29%), then fashion and gyms (both 16%). It’s a less critical element for customers of on-demand music and video services (4%), where its all about the viewing experience rather than customer service, which is generally seen as convenient and trustworthy.

We also investigated attitudes towards customer experience, trust and loyalty. Despite what we’re told about the Experience Economy, in these sectors at least it was only a factor for - on average per category - 10% of our consumer panel.

Experience was seen as most important in holidays (21%) compared to the other categories, suggesting trust in travel agents, booking sites, flight and accommodation providers is built on whether people have a great time or not.

In the restaurant sector, 12% said experience was crucial for building trust. The proportion picking experience dropped to 9% for gyms, 6% for fashion and 5% for on-demand entertainment.

So trust and faith in brands is built mainly on three features - quality, price and customer service, which can be expressed as the loyalty triangle below:

 
Rare Triangle of Loyalty 2020
 

Experience of a product or service is still important, of course. But brands need to be aware of the functional factors that dominate consumer decision-making and inspire the intuitive trust that fuels their ongoing loyalty.

To find out more about Rare’s latest research and report, Loyalty 2020, get in touch at hello@rare.consulting. You can download the report here.



Rare: Consultancy