Bad interactions and unethical practices impacting brand loyalty
60% of UK consumers admit bad interactions impact their loyalty to a brand and often result in them cutting ties, while one-in-five would leave a brand if they engaged in unethical practices, according to new research from Ello.
The survey of over 2,000 consumers also revealed one-quarter of consumers would leave a brand if they found out they mistreated employees (such as not paying them fairly or forcing them to work long hours). A further one-in-five admitted they want the brands they use to take an active stance on environmental issues, and half would pay a brand more for a product or service over their competitors if they trusted them/knew they were reliable.
When it comes to ranking customer loyalty across various sectors, the data confirmed consumers are least loyal to their insurance provider, when compared to how loyal they are to their telecoms, finance/banking, retail and utilities providers, with supermarkets coming out on top.
Michael Kalli, Managing Director at Ello, commented: “Loyalty can be fragile. We know there are multiple factors impacting brand loyalty and many consumers are now incredibly selective when it comes to who they shop with. While price and customer service have been key for some time, we’re now seeing factors like trust and aligning with brand values have a huge impact on how long a consumer sticks with a brand for.
“Retaining existing customers is much more cost-effective than acquiring new ones, but each and every consumer has different requirements. And when we know that customers don’t feel it pays to be loyal, achieving loyalty isn’t easy. It’s no longer a one size fits all situation and there are many factors brands should be focusing on when developing their customer retention strategy.”
On the sectors it pays to be loyal to, this is how various industries rank according to consumers:
- Retail (supermarket)
- Mobile provider
- Food service and restaurants
- Finance (banking)
- Hotels and hospitality
- Travel (airlines, trains)
- Utilities (gas and electricity supply)
- Insurance (home, car, life/health)
- Telecoms (landline, at home broadband)
- Media (streaming services – TV, music, entertainment etc.)
- Retail (fashion)
- Leisure (gyms, cinemas)
The research also revealed:
- The vast majority (58%) of those surveyed deem loyalty to be length of membership/brand usage
- Two-thirds say loyalty is continuing to purchase product from a brand over a long period of time (around five+ years)
- 35% would put up with a period of poor customer service if the product was good quality, compared to 27% who wouldn’t
“Supermarkets are currently the best performers when it comes to instilling loyalty amongst their customers. There is however still room for improvement across all sectors.
“There are various factors influencing brand loyalty but, above all, ensuring a customer-centric approach is essential for increasing rates of retention,” concludes Michael.