Customer loyalty to brands is fast declining. Numerous studies are suggesting that consumers now have a lesser conviction on brands and they tend to shift from one to another in a short period. The famous rule of 80/20, that is, a brand’s 80% turnover is from its 20% customers has altered to 60/40. It indicates that 60% turnovers will be the responsibility of 40% of its consumers. However, as per trends, this is fast shifting to the 50/50 rule.
Reasons for a declining trend in customer loyalty
Several causes are indicating towards this drift like:
- Companies aren’t able to match the ever-increasing consumer expectation
Businesses are making heavy investments to improve product and service quality. In spite of such efforts, declining customer loyalty is something that companies are experiencing worldwide. That’s because the consuming pattern is changing even faster. And, if the businesses are unable to keep up with their customer’s expectations, the latter will indefinitely shift to another brand that will provide what they seek.
- Digitisation is making everything transparent
Comparing prices is an easy endeavour since consumers are purchasing most products and services via mobiles and tablets in this digital age. Therefore, if a company does not provide additional value to their merchandises, its customer will “purchase for price.”
- Loyalty cards are doing more harm than good!
Customer loyalty is not something one can sale; it is earned by the brands. However, with loyalty cards, it just seems like a shortcut for them to create customer loyalty. Latest studies contrarily show that such schemes slash the profit margins of its existing customers in comparison to the newer cardholders.
How can brands regain customers’ faith?
Nonetheless, marketing experts like McKinsey say that one window is still accessible to recuperate the lost loyalty – customer advocacy. How can one do that?
- Focusing on relationships
Making customers again fall for the respective brand with quality products along with splendid customer experience and remarkable after-services is worth the effort.
- Rewarding customers
Giving sneak peeks of the newer products and hosting events with special invitee cards are some of the effective loyalty programs that can work to the benefit of a company. Other means for such ends are sending exclusive offers and providing VIP services to loyal customers.
- Speed up
The 71% of online purchasers expect assistance within 5 to 7 minutes while buying something. Ensuring that can help companies retain their customers.
- Empowering advocates
Adhering to the exertions mentioned above will show that a brand is really trying to make a mark. Consequently, customers will turn into advocates who praise and recommend their favourite products to friends and family. Rewarding and empowering these advocates with distinct incentives will strengthen a respective brand’s name.
Benefits of advocacy programs
Advocacy strategies can build a strong base of customers with the following benefits:
- ‘Word of mouth’ plays a significant role in increasing sales
- Consumers trust advocates more than ads
- It doubles the revenue of a brand
Therefore, with such remunerations, customer advocacy is the best return that one can ask for the efforts they put in a business.