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Aggressive retention strategies stem promiscuous shopping behavior
Penny-pinching consumers in the UK are prone to 'promiscuous shopping', seeking out the cheapest deals. The companies that do best in this climate are those that adopt an aggressive customer retention strategy backed up by strong loyalty programs, according to new research from marketing support services firm GI Insight.
GI Insight's survey of 1,000 UK consumers reveals the importance of strengthening relationships with consumers during tough economic times. Consumers looking for bargains are taking advantage of coupons and promotions and flitting from one retailer or service to another. Businesses that have used Groupon promotions have found just how little loyalty there is when consumers go bargain hunting.
Companies have noticed this promiscuous behavior and have upped their efforts to make the best use of the data they have to build stronger relationships with consumers. In fact, GI Insight's study shows that even when the economic future has looked more positive, companies have not reverted to acquisition campaigns but have instead continued to focus on building and maintaining loyalty.
Consumers across Britain have noticed the efforts being made to keep their business. Among GI Insight's findings:
- 77% of consumers said they don't like giving companies their personal information unless it's via an established loyalty program;
- 68% of consumers said a loyalty program was a factor in keeping them purchasing from at least one business over the past couple of years;
- 58% of consumers said the companies they purchase from have been sending a greater number of relevant and personalized communications and offers over the last year;
- 58% of consumers say they have been rewarded for their loyalty and, for that reason, have stayed faithful;
- 54% of consumers believe companies they have dealt with have used their personal data to improve the service they received over the last year.
"With studies exposing that it costs up to ten times more to generate new custom than to uphold existing relationships, maintaining a pool of current customers and reducing churn is imperative - particularly in a turbulent economic environment," said Andy Wood, managing director of GI Insight.
"It is telling that our survey reflects the fact that customer retention has clearly been top of the agenda for many businesses over the last few years, with many having realized the importance of loyalty schemes in helping them achieve this."
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