Aussies likely to ‘cheat’ on favourite brands
Customer loyalty goes significantly deeper than traditional points-based reward programmes, with retailers needing to better understand the key drivers that build more loyal relationships, according to findings from global loyalty marketing agency, ICLP.
ICLP said the majority of Australian consumers are now in less committed relationships with their favourite brands than ever before, with only 3 per cent feeling devoted towards their preferred retail brands.
The study, produced in conjunction with a leading relationship expert, looks at psychological similarities between human and brand relationships, and sheds light into what retail, finance and travel brands can do to improve customer loyalty during the holiday season and beyond.
The study shows ‘devotion’, which is a factor of how passionate, committed and intimate consumers feel with a retailer, is key to growing high-value, enduring relationships between people and brands. ICLP surveyed 758 consumers in Australia to rate their experiences with friends and romantic partners, as well as brand relationships, on seven core relationship criteria – recognition, rewards, reciprocity, reliability, respect, trust and communication. The marketing firm also partnered with a global authority on relationship dynamics, Professor Ron Rogge from the University of Rochester, to create a model based on Sternberg’s Triangular Theory of Lovei.
The theory focused on three key components of a relationship: intimacy (willingness to share information with a retailer), passion (brand enthusiasm) and commitment (loyalty), which put into a retail context, allows brands to foster increasingly devoted relationships with customers.
The study found that at their most loyal, consumers fall into the devoted group and are enthusiastic, passionate and committed to a retailer. In addition, devoted customers are the most willing group of consumers to share personal information, opinions and desires with their favourite brands, and are least likely to stray to competitors.
The power of devotion Devotion is the most favourable state for retail brands, as the study found that 88 per cent of customers that fall into this group would recommend a brand they are devoted to. Only 8 per cent of customers in a ‘liking’ relationship would recommend a retailer to others, 23 per cent in a ‘casual’ relationship, and 37 per cent in a ‘companionate’ relationship, revealing how powerful a devoted relationship is to a retailer’s bottom-line.
The study found that consumer interest in loyalty programmes remains high in terms of encouraging spend, as 73 per cent of shoppers stated they would be encouraged to shop more with a brand if it had a loyalty programme.
“A majority of respondents approached their relationships with favourite brands in a very similar manner to how they approached their close relationships,” said Rogge. “Therefore, developing a strong and devoted relationship with a brand might not be so different from developing a strong and caring bond with another person, suggesting that people might buy with their hearts.
“This is exciting work, as it not only allows us to better understand and track the various types of brand loyalty, but it will also provide retailers with critical insights into targeting the needs and desires of specific classes of consumers in order to promote greater loyalty.”
Simon Morgan, GM at ICLP, said brands today are finding it difficult to bond with their customers, with the level of choice causing consumers to be increasingly distracted. “Our research shows that what consumers need from a brand to build an emotional connection is very similar to what they require from relationships, with friends and loved ones,” he said.
“That is, good communication, reliability, consistency, reward and recognition.
“If brand relationships weren’t dynamic and ever-changing, then you would have pretty much a static number of customers year-in, year-out. I think brands across any sector can look at this research and begin to explore a new model for cultivating brand loyalty. Truly understanding the emotional factors that contribute to a consumer’s devotion to a brand – that’s what we’re working towards.”