Commentary

What Price Loyalty? Shoppers Want Personalized Offers, Ethical Behavior

Loyalty is still built largely on discounts — but not quite as much as it once was, judging by Digital Consumer Trends Index 2021, a study by Cheetah Digital in conjunction with  Econsultancy.

Of the consumers surveyed, 36% say “I will get the best price," up from 33% in 2019. Speed of service is also more popular, with the percentage who cite it rising from 13% in 2019 to 17% in 2020. 

The results are slightly different for what keeps people in loyalty programs. When asked what makes them loyal to a brand, 48% say great products and services, up from 41% in 2019. Safety is also critical, going from 10% in 2019 to 26% in 2020. 

Not that consumers are happy — 79% would like if it brands spent less on Facebook advertising and more on their loyalty programs, although that may be more a comment on Facebook than loyalty efforts.  

This is critical for email marketing teams, given the propensity of consumers to buy by email. The respondents have purchased in these channels in the last 12 months: 

  • An email — 45% 
  • A post in social — 43%
  • An advertisement in social media — 42%
  • Banner ad on a website or app — 33% 
  • SMS/MMS messages — 24% 

In addition, over 50% downloaded a mobile app for a store, a service or bought something from a mobile offer. 

What else do shoppers desire from brands? A flat 29% YoY say that products have to fit their style, and 18% want companies to behave responsibly, down from 21% in the prior year.  

A positive feeling about the rewards program motivates 22% to stay, down from 25% in the prior year. And 22% cite customer service, flat with the prior year. Convenience has fallen from 25% to 21%.  

At the same time, there has been a 50% hike in those who want to feel part of a brand’s community, and a 36.1% rise in those who want early or exclusive access to products.  

This has been accompanied by a 33% rise in shoppers who want suggested products based on their self-reported preferences, and a 22% lift in those that crave brand recognition.

And while discounts are still tops among the offers that will bring consumers back, the percentage has declined from 62% to 57%. And points and rewards have fallen even further, from 65% to 52%. 

Overall, 36% of consumers are now more likely to take part in a loyalty program—a 9% increase.

The study also found that 73% have chosen a favorite brand because it uses their data in a way that makes them comfortable. And 83% have a favorite that provides a consistent customer experience. 

Moreover, ethical use of data use is crucial for brands, especially with the impending demise of cookies.  

"The only “privacy-friendly” substitute to cookies is first-party data,” states Cheetah Digital CMO Richard Jones. 

Jones adds, “Consumers are tired of being tracked. Google, Apple, Mozilla and the likes all know it, so, of course they’re pushing out new solutions that look like a safe bet for marketers scrambling to replace cookies.”

The only way forward for brand marketers is “first-party data,” Jones continues. “The future of marketing demands brands build their own databases and strengthen relationships with customers. 

Where are brands failing? When they send:

  • Irrelevant content and offers — 42% 
  • Messaging based on information about me that I hadn’t share directly with the brand — 30%
  • Messages that don’t relate to my decision-making — 30%
  • Messages that didn’t recognize my shopping history — 28%
  • Messages that doesn’t understand my wants/needs — 27%
  • Communication delivered at the wrong time of day — 20% 

As for Facebook, 77% “look positively on brands pulling ads from Facebook over concerns about the rise of harmful content.”

And, two thirds think retargeting ads derived from cookies is “creepy, not cool. 

Cheetah Digital surveyed 5,000 consumers in six countries.

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