New Delhi: Traditional “low price" and “reliable service" mechanics are no longer working for brands trying to earn customer loyalty, according to a global report titled Seeing Beyond the Loyalty Illusion: It’s Time you Invest more Wisely, published by consulting firm Accenture Strategy.
Instead, what is influencing customer loyalty across the country and driving customer relationships in the digital age are small tokens of affection, frequent interactions and new experiences, said the report.
According to the report based on an online global survey of 25,426 consumers, including 562 in India, 86% of Indian consumers have switched providers in the last one year, while 43% said that their expectations around brand loyalty have changed.
“With millions of loyalty points sitting dormant and the majority of Indian consumers (85%) retracting loyalty at profit-crushing rates, organizations must pay attention to the new factors driving customer loyalty in the digital age or risk losing customers for good," the report said, adding that companies should rethink their strategies to earn customer loyalty.
About 65% of the respondents said that Indian consumers feel loyal to brands that present them with small tokens of affection like personalized discounts, gift cards and special offers.
“New ‘languages of loyalty’ have emerged, driven by brands experimenting with creative digital experiences, which have changed the dynamics of customer loyalty today," said Vineet Ahuja, managing director, advanced customer strategy at Accenture in India.
Ahuja added that companies need to relook at the loyalty mechanics. “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," he said.
While 81% consumers are loyal to the brands that safeguard and protect the privacy of their personal information, 69% are loyal to organizations that present them with new experiences, products or services.
Interestingly, 68% of Indian consumers are loyal to brands that interact with them through their preferred channels of communication, the report said.