Organisations are wasting billions of dollars each year on customer loyalty programs that don’t work like they used to, according to new research from Accenture Strategy.
The Accenture Strategy report ‘Seeing beyond the loyalty illusion: it’s time you invest more wisely’, gauges the experiences and attitudes of 25,426 consumers around the world, including 1,343 Australian consumers, about their loyalty relationship with brands and organisations today. The report found that 51 per cent of surveyed Australian consumers have switched provider in the past year, with 20 per cent confirming that their expectations around brand loyalty have completely changed.
“The traditional ‘low-price’ and ‘reliable-service’ mechanics are no longer as effective at driving loyalty,” said Robert Wollan, Senior Managing Director, Global Lead of Advanced Customer Strategy at Accenture Strategy.
“With 58 per cent of Australian consumers spending more with the brands they love, organisations that stick to traditional approaches and don’t explore the new drivers influencing loyalty risk draining profitability and pushing customers away – even when they have the best intentions or are following their historical playbook. It’s time for organisations to take a fresh look at loyalty.”
Accenture Strategy has identified five ‘languages of loyalty’ it says are driving customer relationships in the digital age, particularly among Australian millennials:
Tokens of affection – 56 per cent of surveyed Australian consumers feel loyal to brands that present them with small tokens of affection, such as personalised discounts, gift cards and special offers to reward their loyalty.
Get to know me – 38 per cent are loyal to brands that offer them the opportunity for personalising products to create something that is bespoke to them. Forty-six per cent are loyal to brands that interact with them through their preferred channels of communication. Seventy-three per cent feel loyal to brands that are there when they need them, but otherwise respect their time and leave them alone. Eighty-one per cent are loyal to brands that safeguard and protect the privacy of their personal information.
Thrill seeker – 42 per cent are loyal to brands that actively engage them to help design or co-create products or services. Thirty-six per cent are loyal to organisations that present them with new experiences, products or services. Twenty-seven per cent are loyal to brands that engage them in ‘multi-sensory’ experiences.
If you like it, I like it – 18 per cent are loyal to brands that team up with celebrities, and another 17 per cent feel loyal to organisations that partner with social influencers, such as bloggers and vloggers. Thirty-nine per cent are loyal to brands that their family and friends do business with. Thirty-four per cent show loyalty to brands that actively support shared causes, such as charities or public campaigns.
Hook me up – 40 per cent feel loyal to brands that connect them with other providers, giving them the ability to exchange loyalty points or rewards. Forty-five per cent are loyal to brands that keep them on the cutting edge by consistently offering the latest products and services.
