Marketing performance partner Go Inspire (a Xerox company) has found over a third (37%) of senior marketers are already noticing a drop-off in brand loyalty as consumers shop around for deals to combat the cost-of-living crisis.
A further 47% believe the changing behaviour of customers switching to rival items is price driven.
In its new report Retail Loyalty Unleashed, Go Inspire explores the views of more than 100 CMOs, Heads of Insight, Loyalty and CRM at large retailers in the UK, studying their approaches to building customer loyalty.
Over half (55%) of those who were polled say they expect their organisation will allocate most resource to shoring up retention and loyalty of existing customers in the next 12 months, while only around a fifth (21%) will mainly focus on new customer acquisition.
The importance of focusing on customer retention is vital, as 45% of respondents identify a direct link between loyalty and sales growth.
Tellingly, every single respondent agreed that some elements of loyalty strategy must change, stating that their firms will adopt strategies like enhancing deals and offers for existing customers (32%) and beefing up loyalty incentives for new customers (25%).
Meanwhile, when asked to identify the best way to achieve loyalty targets, the highest proportion of respondents (37%) named access to better data and customer insight.
With marketers placing precedence on loyalty and retention, just as consumers begin to cast around and become less brand-loyal, this looks set to be a challenging time for CMOs and their teams.
But the discovery that consumers are still engaging with loyalty schemes means there are still ways brands can maintain strong relationships with their customer base.
Pat Headley, CEO at Go Inspire Group, said: “It’s no surprise that consumer habits have shifted due to the pandemic and the resulting cost-of-living crisis, but the real question is how organisations should navigate this unchartered terrain, and continue to grow and succeed.
“Go Inspire has a lengthy heritage of working with retail clients on their loyalty schemes, and we’re big advocates of an initiative that benefits both customer and retailer.
“Organisations must prioritise their data, their strategy and how they talk to their customers – that’s how they’ll make it through the financial crisis.”
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