Many businesses probably already recognize the value in rewarding customer loyalty. But in today’s market, those rewards may also seem like an easy place to make cuts. And if you don’t have a loyalty program, it may not seem like the right time to start one. After all, your loyal customers aren’t going anywhere — right?
It’s not that easy anymore. The current economic concerns make customer loyalty both more important and more difficult to earn and keep. Despite tighter budgets, check out these statistics before you decide to cut back on rewarding customer loyalty.
READ MORE: How Rewards for Loyal Customers Support Your Lead Generation Efforts
Only 15% of consumers are committed to a specific brand. (Source: Gartner)
In 2021, the average consumer loyalty score for all U.S. retailers was 1.37, compared with the highest scorer, Walmart at 4.18. (Source: Statista)
More than a quarter (26%) of consumers said in 2022 that they stopped using or buying from a business in the past year. Younger consumers were even more likely to have left a brand behind. (Source: PwC)
What it means: Your loyal customers are a lot less loyal than you think. The increase of online shopping and services during the pandemic already showed consumers how many options they truly have. But now, with today’s economic concerns and pressure on discretionary spending, the likelihood of customers switching brands is at an all-time high.
During the last recession in 2008 and 2009, 38% of customers switched brands. (Source: Qualtrics)
What it means: It’s not just a guess that a tough economy makes buyers even more willing to take their business elsewhere — it’s behavior that’s been seen before. You have to be on top of your game and offer just the right balance of value and experience to retain customers.
Eighty percent of surveyed businesses planned to invest more in their customer loyalty programs in the coming years. (Source: Statista)
What it means: If your strategy in the coming months doesn’t include investing more in rewarding customer loyalty, you’re already behind. With the majority of companies discovering the importance of and putting money into programs that build customer relationships, you need to do the same to keep up with your competitors.
Of consumers who said they are spending less because of the economy, more than 82% still buy from their favorite brand. (Source: Yotpo)
American shoppers say that if they’re loyal to a brand, they would be willing to delay a purchase until its products are back in stock (67%), pay more despite cheaper competitors (54%), and recommend the brand to others (60%). (Source: Yotpo)
What it means: Even when there are economic concerns and consumer spending is down, rewarding customer loyalty is still worth it. If you can give your repeat customers the best experience possible, that’s business you can count on, no matter what the circumstances.
Nearly a third of survey respondents (30%) cite the benefits and rewards of a loyalty program as a top reason for regularly patronizing a business. (Source: PwC)
What it means: Loyalty benefits are second only to value in regard to why consumers make repeat purchases. But rewarding customer loyalty is also actually part of how people perceive the value of buying your brand. Rewards make those regulars feel like they’re getting more for their money when they earn something back.
The most important parts of the personalized experience consumers want are rewards for products they use regularly (48%) and a loyalty program with flexible rewards (43%). (Source: PwC)
What it means: The desire for more personalized experiences has been growing over recent years, but now, that means much more than wanting the right product recommendations and a name in the email subject line. Rewarding customer loyalty has to allow for flexibility so that consumers can get the rewards they want and need at that moment in time. For instance, right now, given high inflation, they may want rewards for essentials like groceries and household supplies. But in prosperous times, they may prefer rewards for more leisurely purchases, such as travel and dining out. Your loyalty program should support both and let customers choose.
Of those who reported leaving a brand, the top reasons were a bad experience with products or services (37%) and a bad experience with customer service (32%). (Source: PwC)
What it means: Rewarding customer loyalty isn’t just about repeat buyers racking up points or getting freebies. It’s also about making it right when someone inevitably has a bad experience. By using rewards with unhappy buyers, you show them that you’re committed to taking care of your customers to increase the chance that they’ll reconsider and come back.
Want to see how to take your customer rewards to the next level? Here are six statistics about customer advocacy you should know.
Hannah is a reformed journalist who has more than 15 years of experience and now focuses on content marketing for innovative tech companies.
Hannah is a reformed journalist who has more than 15 years of experience and now focuses on content marketing for innovative tech companies.
