Why Breaking Bad Habits Can Boost Customer Loyalty

It’s a great time to be an entertainment brand - especially those available on subscription.

At the last count, Netflix had reached 139 million paying subscribers worldwide (source: CNN). With its relatively low monthly cost (in comparison to cable and satellite TV providers’ fees) and massive content library, the service is contributing to the ongoing trend of ‘staying in is the new going out’.

According to a survey by travel site HolidayCottages.co.uk, two thirds of respondents have experienced JOMO - the ‘joy of missing out' on a night out. In greater numbers, we’re opting for the TV guide over the theatre and supermarket popcorn rather than the pub.

As part of our major new study, Loyalty 2020, we surveyed 1,000 UK-based consumers about their attitudes towards ten brands selected in several sectors: hotels, restaurants, gyms and on-demand services. Each brand was given an overall score totalled from responses given to six statements by our panellists.

One of the questions was, “To what extent do you agree with the statement ‘Does [brand X] deliver on its promise’” Of all 40 brands, only Netflix was deemed to do just that. Marketing departments are constantly juggling the battle between selling the dream and delivering the reality, and our results further emphasise this constant conflict.

Furthermore, the video streaming service was the only brand to be rated above the industry benchmark in five of the six categories.

Overall, the third-placed brand was Spotify. The music subscription service, which has 217 million active users (source: Reuters), was one of just three out of the 40 in our study to beat the benchmark for personal affiliation: consumers agreeing with the statement, “It’s just like me.” The other two brands to achieve this were Netflix and Nando’s.

In fact, Nando’s was the meat in the entertainment subscription sandwich, ranked 2nd by consumers overall, between Netflix in 1st and Spotify in 3rd. So, what is it that makes these entertainment brands so awesome in the eyes of their loyal customers?

Firstly, consumers identify with them. Secondly, in the case of Netflix, ease of use - the crucial convenience ingredient - put it above rival entertainment services. Thirdly, and particularly for music services including iTunes, Deezer and Spotify, personalisation is key.

Lots of brands are spending big on the personal touch, and we hear a lot about big data being used to create tailor-made products and services for individuals. Given the results across all four sectors, there’s still a long way to go.

So what can brands in other categories learn from this excellence in entertainment to reinvigorate their own loyalty performance? In terms of personalisation, it comes down to mindset. Brands must set themselves up around a company culture that values and supports a customer-centric approach to service design and delivery, as well as access and analysis of the right preference, behavioural and attitudinal data.

Meanwhile, when it comes to truly meeting expectations, businesses need to focus on adding value rather than simply giving value for money. Imagine what added value could be created if hoteliers built out preference data models similar to what we see for Spotify. Although this is common practice in the luxury hotel market, it is an opportunity for improvement in the mainstream.

We’ve got much more insight to share about what made Netflix top the charts in our brand Top 40, and how its intrinsic features are paving the way for a new loyalty framework. You can read more it on our latest blogpost.

You can download our latest research report, Loyalty 2020, here.

To find out more about Rare’s research and how we can help you build a winning loyalty scheme, get in touch at hello@rare.consulting.