Conflicted consumers are loyal, but always looking for a deal

Half of consumers tend to remain loyal to brands they like, but the vast majority still spend time researching products to make sure they get the best deal, according to DMA research

27 June 2017 – A climate of intense uncertainty where any authority can be challenged, any claim discounted and any truth upended typifies 2017. Since the last Customer Engagement study in Spring 2016, the concepts of “post-truth”, “echo chambers” and “filter bubbles” have become part of mainstream language. The urge to question what and who we believe in has sharpened as consumers have grown accustomed to the routine challenging of claims.

Against this backdrop, the Customer Engagement 2017 research reveals conflict in consumer mindsets, with more than half (55%) of consumers agreeing that they tend to use the same brands/shops/sites without looking for alternatives. But at the same time eight in 10 consumers (81%) said they are willing to spend time researching products to get the best deals. In a time of rapid technological change nearly half of consumers (46%) also say they find it difficult to know which brands or companies to trust.

According to the research, conducted by the DMA and Foresight Factory, with partners Emarsys, Epsilon, Feefo and Wiraya, consumers want loyalty rewards to be more relevant. More than seven in 10 (72%) said they would like loyalty offers to relate more closely to what they like, compared to 62% in the 2016 study. Three in 10 rank receiving discounts as ‘very effective’ in encouraging them to share personal information with brands. In the light of new GDPR laws are set to come into force in May 2018, a quarter (25%) of consumers also rank choosing what data is shared from a menu as ‘very effective’.

Scott Logie, Chair of the DMA Customer Engagement Committee and MD at REaD Group Insight, said: “Now in its second year, this report on the growing complexity of customer engagement and loyalty highlights that trust can be built in many different ways. To a certain extent, it can be bought through rewards and cashback. However, for sustainable loyalty and trust there is a need for brands to be more genuine, have strong values and be seen to live these values. The introduction of new technology could well become a bridge to help brands increase their emotional connection with consumers in what is becoming a very non-personal world. The appetite from consumers for new ways to engage appears to be increasing, but we’ll have to wait and see if this interest transitions into usage in the coming years."

Alex Timlin, ‎VP Client Success at Emarsys, said: “It’s essential that brands recognise and value their customers now more than ever because loyalty has become a huge issue in the area of digital brands and personalisation. Consumers spend more and more of their time in digital brands like Google, Facebook, Instagram, Twitter, or Netflix, which has disrupted old engagement models. Personalised, behavioural ad targeting makes it ever more difficult - and expensive - to penetrate these ‘bubbles’. With people spending more of their time in fewer places and increasingly on mobile, brands must focus on fighting for share of mind rather than just share of wallet.”

Matt West, CMO at Feefo, said: “In the era of fake news, no business can take customers for granted. It’s clear from this research that previously loyal customers increasingly don’t know who to trust. All brands will have to re-address how they approach this trust problem, using every tool available, from platforms providing authenticated customer reviews, to more personalised loyalty programmes and the fast-evolving use of artificial intelligence. Brands can reap all the rewards of loyalty, but only if they give customers new reasons to trust them.””

New and emerging technologies

AI decision making tools like voice assistants or chatbots give consumers the chance to delegate decision making about brands. Four in 10 consumers are interested in using a personal virtual assistant that knows their tastes, which they could use to research or buy items on their behalf.

Automated replenishment technology has the potential to lock in consumer loyalty, particularly with young families, as one-third (36%) of consumers with children under 16 would be interested in using a service that allowed them to set up automatic re-purchasing and delivery of everyday items such as tea/coffee when they run out.

Rachel Aldighieri, MD at the DMA, said: “Increased use of automated services gives brands more room to focus on building deeper, more emotional loyalty. But there will be challenges. Brands need to understand where new channels will be the most appropriate and effective in the short term, and which consumers will be best disposed to adopt them. The pace of technological change will continue to outstrip the legislation governing it, reinforcing the importance of self-regulation and evolving effective best practice in the data and marketing industry.”

Sam Madden, Commercial Director at Wiraya, said: “Using Artificial Intelligence (AI) and other emerging technology through relevant channels relies on a greater understanding of consumers and preferences in order to provide a more human approach. This will, in turn, enable greater trust and transparency to be communicated in a world where engagement is increasingly digital first. AI in particular will be key in offering businesses this human approach while scaling across a large customer base and businesses should see the challenge of incorporating this technology into their business as a huge opportunity too.”

Stephanie D’Sa, Head of Strategy & Insights at Epsilon, said: “The customer experience in 2017 has changed in ways that would have been unimaginable just a few years ago. Engagement plays an integral role in shaping loyalty today, which is only set to continue. People now have a growing expectation for personalised, relevant and consistent experiences with brands across all channels. They are still shopping in-store and online, and are increasing their buying frequency across the newest channel mobile; expecting value and loyalty at their fingertips. Brands can create entrenchment by leveraging real-time intelligence to unlock an exciting variety of instant rewards and recognition that’s consistently matched with positive customer experiences. The cost allocation between channel usage and go-to market strategy is crucial in achieving an ideal return on investment.”

To read more about the DMA's Customer Engagement research into the Loyalty, including the full report, visit: https://dma.org.uk/customer-engagement

– ENDS –

For further information contact the DMA Press Office:

Ed Owen, PR & Content Manager Tim Bond, Head of PR

T: 020 7291 3324 T: 020 7291 3328

E: ed.owen@dma.org.uk E: tim.bond@dma.org.uk

About the DMA

The DMA is a UK trade association for the one-to-one marketing industry - those companies that speak directly to their customers and those companies that help them achieve this. The DMA provides best-practice guidelines and legal services for its members, who are typically marketing, advertising and data-driven organisations.

More than 1,000 companies in the UK are DMA members. The DMA also holds industry events, conducts research and publishes reports, lobbies for legislation to support its members’ business practices and has a close working relationship with the Information Commissioner’s Office. All DMA members must comply with the DMA code, which is available to read here: http://dma.org.uk/the-dma-code.