A new national survey from marketing cloud solutions firm Yotpo examining American shoppers’ attitudes about brand loyalty reveals evidence of Amazon’s influence on consumer expectations, and highlights ways that direct-to-consumer brands can go above and beyond to earn—and re-earn—customer loyalty.
“No one is better at the transactional relationship than Amazon, who successfully engineered loyalty by making things like free shipping and discounted pricing table stakes,” said Tomer Tagrin, co-founder and CEO of Yotpo, in a news release. “To win, brands need to be able to transcend transactions and offer a superior experience in every way, from product excellence, great customer service to personalized experiences that foster a deeper connection. Brands can only gain true competitive advantage by developing a direct relationship with their consumers, and this survey stresses where the opportunities might lie.”
The Amazon Effect is showcased by findings such as that 61.3 percent of shoppers cite free shipping as an incentive to buy from a new brand. Additional takeaways from the 2018 State of Consumer Loyalty study include:
Consumers care about brands
Nine out of 10 (90.2 percent) consumers consider themselves equally or more brand loyal compared to a year ago
Product is the point of entry and departure for brand loyalty, a validation of the “hero product” concept that are the specialty of modern direct-to-consumer brands like UNTUCKit, Quip and Away Travel.
For the majority of consumers:
- Loving the product is the No. 1 reason they’re loyal to a brand (55.3 percent)
- Poor product/quality is the No. 1 a brand loses their loyalty (51.3 percent)
For brands they are loyal to, consumers are willing to:
- Tell friends and family about the company (60.0 percent)
- Join a loyalty / VIP program (52.3 percent)
- Spend more on a product even if there are cheaper options elsewhere (39.4 percent)
- Leave feedback / online review (37.0 percent)
- Participate in a contest / promotion (31.8 percent)
Brand loyalty needs to be earned and re-earned
It takes a lot of purchases to cultivate loyalty. Before considering themselves loyal, shoppers need to buy from the same company:
- Five or more times (37 percent)
- Three times (33 percent)
- Four times (17.7 percent)
- Two times (12.4 percent)
Certain factors are more effective than others in driving those repeat purchases. For more than half of consumers, these were the motivators to buy:
- Fair pricing (64.5 percent)
- Free shipping (61.3 percent)
- Online reviews (57.3 percent)
Amazon’s influence can be seen in what consumers expect brands to provide in return for their loyalty: more frequent discounting (71.0 percent) and free shipping (58.4 percent). Brands should consider offering additional benefits and enhancements:
- Bonus gifts (43.4 percent)
- Custom promotions and product recommendations (36.9 percent)
- VIP and early access (26.2 percent)
- Exclusive events (22.5 percent)
Consumers demand great customer service
- Customers expect a response from a brand in 24 hours or less (67.3 percent)
- Poor customer service (23.5 percent) comes in second to poor product as a key reason for losing customer loyalty
- As a potential touchpoint for customer service, Facebook reigns as the top social media channel for engaging with favorite brands (44.5 percent)
“The survey findings reinforce our philosophy that although price and convenience are important for our customer, they are increasingly table stakes. More and more, consumers are looking to premium brands to provide value beyond the transaction,” said Erica Richey, head of retention marketing at ThirdLove, in the release. “At ThirdLove, our core motivation is to provide each customer with a highly personalized experience. We earn her loyalty by developing an individual understanding of each customer and curating products and crafting programs that resonate with her individually and personally.”
Read more about the study here.
Yotpo’s 2018 State of Consumer Loyalty presents findings from a survey of 2,000 U.S. adult (18+) consumers, conducted by AYTM for Yotpo in July 2018.
