PwC’s recent survey of over 400 customer retention executives reveals a foundational difference between how executives and customers define and perceive loyalty. Whereas one-third (37%) of leaders believe pricing has contributed to attrition, just as many consumers cite a poor experience with products or services. And the dissonance doesn’t stop there.
In this article, PwC Customer Transformation Leader George Korizis discusses the significance of driving customer loyalty as leaders strive to deliver the right experiences and products in moments that matter.
In this piece:
- Customers and leaders surveyed are worlds apart when it comes to perceiving versus actual loyalty motivators, leaving companies with much to learn and act upon.
- Balancing personalization and long-term engagement requires thoughtful data collection to understand customers within their comfort zone.
- Reliability and quality are at the center of not only attaining but maintaining customer loyalty.
Reframing customer loyalty strategy to align with consumers and build lasting relationships
A PwC perspective written by George Korizis, Customer Transformation Practice Leader
It has been three years since the beginning of the pandemic, and we are beginning to understand long-term impacts on customer behavior.
According to a recent PwC survey, the pandemic was more often cited by executives as having a positive impact on loyalty (45%) rather than negative (33%). However, there is a disparity between executive and consumer sentiment. 61% of executives believe consumers are more loyal now than before the pandemic, with only 20% of customers agreeing.
This perception gap is impeding companies’ loyalty strategies. Although they can agree on why a consumer will remain loyal, quality and value, executives and consumers are split on what attracts loyalty. When discussing the moment in which loyalty is won, 25% of executives believe that good customer service is the key while only 11% of consumers agree. Compared to executives, consumers are twice as likely to value high-quality products as being central to gaining loyalty.
Not only is there a significant gap between how the two groups view building loyalty, but they also differ on how brands fall short when maintaining loyalty. While 37% of consumers cite leaving a brand after a bad experience with products or services, executives put the blame on price changes or competition. The opportunity and need exists for companies to better understand their consumers.
Organizations can utilize research panels to prioritize consumer needs, wants and preferences to focus loyalty efforts on a strategic approach. Data is king. Use collected consumer data to create personalized experiences and find the balance between personalization and long-term engagement.
Consumers today want personalized discounts and rebates (48%) and flexible loyalty programs (43%). Other types of personalized programs that a significant percentage of companies are investing in, including easy access to products or services (47%), are nowhere near being a top priority for consumers.
Many consumers are willing to accommodate companies that request basic contact information and personal identifiers like email, birthday and age. While information collection is key to personalization, consumers are less open to sharing usage and location data. Companies surveyed by PwC shared that they generally collect more types of data than consumers say they are willing to share.
To better understand your consumers, dig into data to determine what is generating greater insights for building loyalty, double down on key priorities and conserve organizational efforts by scaling back on less impactful, more invasive data collection. Then, analyze how consumers interact with your brand to focus on moments that matter, provide personalized experiences during these touchpoints to establish the basis for loyalty.
Many organizations have already taken strides to improve the customer experience and to build relationships; 63% of executives say their company’s loyalty program budget increased in the latest planning cycle. Although offering rewards points and unbeatable customer service is a step in the right direction, customers are mainly seeking something simpler: reliable and high-quality products or services.
Customer service remains a worthwhile priority for every organization, but is not the number one influencer among consumers. In reaching customers and capturing their loyalty, the best course of action is to find the various touch points along the customer journey that are opportunities to win loyalty, not only when interacting with customer service.
Customer loyalty is no longer only about customer reward systems, and goes both ways. Customers have created their own index of how companies are performing, and companies have a responsibility to understand their customer sentiment and make moves to retain customers when sentiment is high.
When strategizing for customer loyalty, organizations need to think beyond near-future challenges such as inflation and supply chain disruptions. The actions taken to mitigate current challenges should not displace long-term strategy. Consumers are telling us exactly what is most important to them. Seek new and deeper information about your customers and consider how changes to loyalty efforts in the near term could also open the door for lasting relationships. Methods that have worked in the past can and should be refreshed for the future.
George Korizis, Customer Transformation Practice Leader, has the privilege of leading a cross-industry team of exceptional professionals who focus on outcome-based advice, innovative thinking, and delivery of outstanding customer-centric transformations that meet the world where they are tomorrow. How do we help our clients transform into the ultimate customer attractors? Learn more: www.pwc.com/us/customertransformation