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BizReport : Loyalty Marketing : February 14, 2017

Study: Brands must reevaluate loyalty

Loyalty isn't what it used to be, and brands are losing money because of it. That's a key takeaway from the new Accenture Strategy report, "Seeing Beyond the Loyalty Illusion". According to researchers more than half of US consumers have changed brands/providers in the past year.

by Kristina Knight

Switching providers/brands isn't a death knell - at least usually - but what is perhaps more important is that nearly 20% of those surveyed say their feelings about brand loyalty have changed completely.

While some brands are staying up to date with their loyalty program, many are not, and those changes to customer loyalty and brand loyalty are costing, some experts suggest the costs to brands from bad loyalty programs is in the billions.

"Every consumer has a natural instinct around what makes them 'stick' to a brand. 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 66 percent of U.S. consumers spending more with the brands they love, organizations 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 organizations to take a fresh look at loyalty."

Other interesting takeaways from the report include:

• 59% of consumers 'feel loyal' to brands offering them small rewards - like gift cards and personalized discounts - because of their loyalty
• 41% 'are loyal' to brands that personalize their program offerings
• 44% 'are loyal' to brands that ask them to help design/create products
• 23% 'are loyal' to brands that include celebrity endorsements

Tags: Accenture Strategy, customer loyalty, loyalty marketing, loyalty trends

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