By George Korizis and Jon Glick
During times of economic uncertainty, supply chain disruptions and an ever-shifting talent market, fostering and strengthening relationships with customers has never been more important for a brand’s survival. Yet, according to a recent PwC survey, there is a discrepancy between what companies and customers believe customer loyalty to be. With customer feedback and data-backed insights, organizations have a prime opportunity to reevaluate and redesign their customer loyalty strategies to address near-term shifts while prioritizing long-term growth and lasting relationships.
Insights from PwC:
- PwC surveyed over 400 Customer Loyalty executives and more than 4,000 consumers, revealing a gap in the perception of retention values and strategies.
- Customer service is the heartbeat of customer experience but could be distracting from what may actually win loyalty.
- Personalized experiences, when executed thoughtfully, provide a compelling value exchange for customers asked to share their personal data.
Customers and executives: not necessarily on the same page ─ yet
Recognizing that customer preferences and behaviors have changed as a result of the COVID-19 pandemic is crucial as executives strategize for long-term growth and customer loyalty. The same survey shows that when discussing the effects of the pandemic, 61% of executives say their customers are more loyal today. This sentiment is not shared by customers, as only 20% stated that they are more loyal to brands they had a relationship with prior to the beginning of the pandemic. Furthermore, 45% of executives agree that the pandemic had a positive impact on customer loyalty. This gap reveals a fundamental disconnect between companies and customers.
In our survey, executives cite digital distribution channels, changing customer behavior and loyalty program changes as the top three initiatives that have had positive impacts on customer loyalty. Executives can work from these data points to further flesh out these investments and expand upon existing loyalty. They can also interface with customers to confirm that these methods genuinely do have the most significant effect on loyalty and were not simply perceived as such by company leadership. Looking at customer loyalty from a short-term point-of-view while keeping stellar offerings and long-term strategy in mind is ultimately how organizations can strengthen customer loyalty.
Beyond simple customer service: centering customer delight
While customer service is an important component of building loyalty, our data shows that it is not high on consumers’ priority list. In fact, more than twice as many executives (25%) as consumers (11%) believe that good customer service is the key to winning loyalty, while only half as many executives (23%) as consumers (46%) believe that high-quality products are key. Brands which win loyalty are those that focus on customers’ priorities, converting one-time consumers into regulars.
But cultivating loyalty is difficult. Naturally, executives have varied approaches, with 61% prioritizing customer service enhancements. However, that may not be enough. While 32% of customers say poor customer service has led them to stop supporting a brand, about as many (37%) have stopped supporting a brand due to a bad experience with products or services.
Approaching customer retention and loyalty through behavioral analytics and data-backed insights presents new opportunities for effective customer loyalty strategies. Leading customer research panels and diving into customer analytics will be a key driver in strengthening new and existing relationships.
Meeting customers where they are: balancing data-sharing and personalization
Personalization is one of the most powerful strategies to maintain and grow customer loyalty. Understanding how customers interact with your brand is essential, with 61% of executives prioritizing personalized customer experiences. Elevating a data-driven approach to personalization involves using data to design tailored experiences and build dedicated relationships, which in turn supports long-term survival.
This presents companies with the opportunity and responsibility of creating a value exchange compelling enough for customers to share their information, and then creating great personalized experiences when they do. Customers report being open to sharing demographic data like their email, birthday and gender for more personalized service.
To best embrace personalization, companies need to offer consumers what they want. Data shows that customers’ top desires are for discounts and rebates (48%) as well as fast access to products and services and flexible loyalty programs (43%). When companies focus on less impactful areas, including customer service, they lose opportunities to invest in the areas that truly matter to building loyalty. By crafting loyalty strategies around customers’ desire for more personalization, companies can create winning strategies that ensure long-term relationships with their target audiences.
Dynamic strategies for shifting customers and lasting growth
While the pandemic has altered the way customers interact with brands, customer loyalty is an ever-shifting concept that requires companies to remain nimble and responsive. Customers are willing to share what works well for them to maintain loyalty and perhaps even more importantly, what leads to dwindling loyalty. Smart and effective businesses will keep their ear to ground and value the feedback that customers provide.
To build loyalty that leads to lasting growth, companies need to create personal experiences for customers and move away from an overfocus on customer service. When customers’ needs are being met, they will need fewer customer service interactions and feel less encumbered, developing a stronger sense of loyalty to a brand.
PwC Customer Transformation Practice Leader, George Korizis
George Korizis leads 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.
PwC Customer Transformation and Loyalty Partner, Jon Glick
Jon Glick is a leader in PwC’s customer consulting practice focused on using a consumer centric vision combined with analytical modeling to help clients answer some of their most important questions related to marketing strategy.