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The Loyalty Tipping Point – When Customers Leave

Last week, we looked at marketers’ ongoing struggle with technology and the disconnect between different marketing solutions, platforms and customer data repositories. This week, we’re taking a closer look at the findings relating to customer loyalty. Just how bad does an experience need to be before a customer will leave a brand? Do customers know what a good experience looks like? Do marketers know what a good experience looks like?

Just how bad does an experience need to be before a customer will leave?

It depends. As you might expect, there’s no easy answer to this question. More than half (54 percent) of those surveyed said that once they become loyal to a brand, they’re loyal for life. This certainly aligns with theories such as the “status quo bias,” a term used by behavioural economists to explain our inclination to avoid taking action unless pushed to do so. But conflicting responses showed that the same number would not consider themselves loyal to any brand. To confuse matters further, four in five said they would only be loyal to a brand until they had encountered a “bad experience,” and would then move to another brand.

There is a definite limit to what consumers will put up with nowadays, especially when it comes to the use of customer data. Half of those surveyed (51 percent) said they are not comfortable with brands gathering their personal data in exchange for an improved experience such as more perks and greater personalisation. On closer inspection, almost two-thirds (64 percent) are not confident that brands have their best interests in mind when they use, share or store their personal data, and 79 percent say brands should not be able to use their personal data to market different things to them.

This lack of trust around data usage isn’t surprising, given recent scandals (such as Cambridge Analytica’s use of Facebook data), and a glance at Edelman’s most recent Trust Barometer report, which showed that consumer trust is at an all-time low.

Do customers know what a good experience looks like?

Yes. One thing that’s clear is that consumers have very clear and high expectations of what they want from their online experiences, with a massive 82 percent stating that they would be most loyal to brands that can show that they really understood them and what they were looking for. Furthermore, 80 percent of those surveyed stated that if they believe a brand really “gets them,” they’re more likely to be loyal. This ties in with a recent research study by FastCompany, which showed that the most popular brands are those that focus on expanding their “share of emotion” rather than their “share of mind.”

However, personalisation will only get you so far and consumers are very much still focused on easy and seamless experiences – a whopping 90 percent of those surveyed say that they prefer brands that make their experience convenient. It’s also worrying to note that almost half of Australians who engage with a brand at least once a week (48 percent) say they have encountered issues such as slow and “glitchy” websites or a slow response from brands during a major online event, such as Black Friday or EOFY.  This is particularly important considering 78 percent stated that they are likely to stop being loyal to a brand after “just one bad experience.”

Do marketers know what a good experience looks like?

Potentially not. Here’s where it gets interesting; the research report surveyed marketers and consumers separately, and it seems that the two groups have very different expectations when it comes to online experiences. Despite 90 percent of marketers claiming to deliver great customer experiences at scale, 54 percent of consumers disagree and say that most brands fail to meet their expectations in online experience. The problem? A lack of personalisation – 78 percent of consumers, in fact, say that experiences are too impersonal, while 73 percent feel that they are being treated as another generic customer.

While marketers may feel they’re doing a better job than they actually are, the report also showed that marketers are in agreement that improved personalisation is still critical, with 91 percent investing more in technologies that can provide added personalisation for customers in the next 12 months. Here’s to a more personal 2019.

To read the full Acquia CX Research Report, click here.

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