Consumer loyalty is built on relationships, not discount and point-collecting programs, survey shows

By Elizabeth Crawford

- Last updated on GMT

Source: iStock
Source: iStock
If retailers want consumer loyalty, they need to do more than give them a plastic card that they can scan for discounts at checkout, a new survey by C Space reveals. 

“Despite the prevalence of loyalty and/or rewards programs across the grocery industry, an examination of brand intuition from the customer’s point of view shows that this kind of transactional, financially based approach is inherently limited, unreliable and does nothing much to build emotional connection,”​ according to the survey of more than 500 consumers conducted by C Space, a global agency that helps brands rethink the role of customers in business.

The survey, published June 6, asked US participants to name a grocery retailer that “really got them”​ and one that didn’t and then rate the companies on 15 attributes and whether they would recommend it or intend to continuing shopping at the retailer.

One of the most surprising findings was that “a loyalty program, or lack of one makes little difference in whether a company is seen as having the customer-centric qualities that engender true loyalty,”​ according to the study.

Rather, loyalty programs “may generate short-term business, [but] consumers will bolt as soon as they have a better option,”​ it added.

Why don’t loyalty programs achieve their namesake?

The main problem with relying solely on conventional loyalty programs to connect with consumers is they reinforce a relationship that is purely transactional, which fosters a fickle relationship between consumers and retailers, Julie Wittes Schlack, senior VP, product innovation at C Space, told FoodNavigator-USA.

“Loyalty is actually an emotional relationship, and it is wrong that it has become a synonym for purchase or repeat purchases,”​ Schlack said.

How to build loyalty

“In our view, if retailers want to build real loyalty they have to do it through relationships. They have to do it by making their customers feel smart and appreciated and valued and they have to do it by focusing on the values that consumers consider most important,​” she added.

Given the importance of relationships in building loyalty, it comes as no surprise that friendly and helpful employees was one of the top values that consumers consider an important attribute of stores that “get them,”​ the survey found.

Specifically, it found 41% of respondents said they want consistent customer service, meaning friendly, helpful employees who proactively provide assistance and who value helping consumers as part of their mission and not just as a way to earn a paycheck.

An enjoyable in-store experience is another key factor in building loyalty that goes hand-in-hand with helpful staff, the survey revealed. Examples of this listed in the study include providing stickers or games to children to keep them occupied while their parents shop.

A unique and curated selection of products also keeps consumers coming back, and is better than a wide variety of products that are uninspiring, many respondents said. They noted Trade Joe’s as a good example of a company with a well-curated selection, which allows them to find exciting new products without overwhelming them or taking too much time to comb through.

That said, the selection must be appropriate to the community it serves, the survey found, noting 24% of respondents said they want a product selection that matches their needs and lifestyle.

“Constantly rotating selection and products tailored to a local audience show that the company has an intuitive understanding of what their customers want and need,”​ the report notes, calling out as good examples Trade Joe’s and Costco.

Consumer turnoffs

The reverse of many of these qualities are unsurprisingly turn-offs for consumers, including unhappy employees, dirty stores, out of stock items – especially if they are promoted products, incorrectly stocked products and an overall assortment that is out of step with the community’s needs, Schlack said.

The good news for product manufacturers, however, is that desire for specific brands or goods often trumps the consumer’s relationship with the retail, she added. This means that consumers will go to retailers they do not like if they carry products that they do like. It also means that any negative-will consumers have towards a retailer is not transferred to the brands that it stocks.

Manufacturers, however, can help improve retailers’ relationships with consumers by providing them with as much information as possible about who buys the brand and why. Insights into the target shoppers’ demographic, lifestyle preferences and shopping habits will help retailers better position products in stores and curate their overall selection, Schlack said.

Recognizing that manufacturers have a lot on their to-do lists already, she emphasized working closely with retailers to improve their relationships with consumers “is a rising tide that will lift all boats.”

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1 comment

Huge factor

Posted by krnewman,

For me one of the biggest factors is how well the employees are treated, including how low the turnover rate is. It affects the whole experience, including the quality of what you buy, I believe.

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