In this post recession-era, one thing can be sure: maintaining consumer loyalty is not a simple task. Colloquy recently conducted its 2010 Retail Loyalty Index of 3,500 U.S. consumer respondents in four retail categories: grocery, personal care, department store, and mass merchant.
This year’s index reveals a profound change in consumer behaviors. Low prices have become the primary reason consumers remain loyal to retailers. Even so, the report suggests that “aggressive pricing strategies and deep discount competition are simply not sustainable over the long-term—so even those retailers that are competing heavily on that level must put other efforts in place if they want to keep customers loyal for the long haul.”
Source: 2010 Colloquy Retail Loyalty Index study
The charts above illustrate a dramatic shift of customer loyalty factors over the past two years. Low prices currently rank number one in driving loyalty to retailers in all categories. Still, it is important to recognize that “cheap” offerings are not the solution. Rather, consumers are seeking significantly more value and value-added experiences for their money. Data across all sectors also revealed a rise in “Quality Products” as a factor for consumer loyalty rankings.
So how can retailers respond to the recession to both retain existing customers or regain customers lost during the economic downturn? How can your programs create a value-added experience?
- Monitor online conversations to better understand changing customer expectations.
- Build a profile to help segment customers into groups you can engage.
- Get intimate with customer insights.
- Join the conversation.
- Disperse the customer insight across your organization.
- Adapt your value proposition to deliver more value.
- Collect the customer data you need to succeed.
To remain successful, retailers today must ultimately implement customer-centric strategies in order to anticipate and exceed customers’ expectations.