Here’s the good news this holiday shopping season: Consumers are open to trying new brands, which means the door is open for savvy consumer-facing companies to entice new customers by delivering on their fast-changing preferences.

The not-so-good news? The flip side of the same finding: Consumers are trying new brands. That means consumer markets (CM) companies have to keep up with their customers’ fast-changing preferences. No more resting on your laurels.

Particularly since the early days of the pandemic, consumers are bucking decades-old loyalty logic and walking away from brands that aren’t keeping up with their ever-changing tastes. This is particularly true for younger consumers.

Deliver the human touch — even online

The bottom line: Consumers are not willing to tolerate a bad experience with a brand or retailer. More than just an angry email to customer support, they’re prepared to spend their dollars elsewhere. In fact, more than half — 55% — will switch brands after several bad experiences, even if it’s a brand they otherwise like.

The top two reasons customers at CM companies cited for switching brands? A bad experience with a product or service (40%) or with customer service (34%). Customers are even less tolerant when it comes to airlines and hotels because of the higher financial commitments typically at stake. More than half (52%) will switch because of a bad experience with a product or service and 45% will do so because of a bad experience with customer service.

How can CM companies respond? By delivering the human touch. Experience in essence is the emotional connection your customers have when interacting with your brand across the entire purchasing lifecycle.

While this can mean delivering seamless face-to-face in-store experiences, it also means a shopping experience that transitions seamlessly from mobile to online to in-store. For airlines and hotels, it means communicating any changes clearly and consistently with customers while listening and responding to their requests.

Connect with customers, earn their loyalty

Successful CM leaders listen to their customers and act on the insights they glean. Here’s what they do:

  • Invest in customer segmentation
    To understand your customers, you should use analytic models that stay current with shifting customer preferences and behaviors. In particular, focusing efforts to better understand younger and more racially and economically diverse groups can uncover new strategies for expanding their loyalty.
  • Experiment with subscriptions
    More than half (55%) of consumers said they belong to at least one subscription service. They like the rewards and discounts as well as expedited access to products and services. Subscriber feedback can be a gold mine of insight into shifting customer needs.
  • Focus on trust
    It’s the loyalty linchpin. A remarkable 93% of consumers make holiday shopping decisions based on brand trust. What’s more, trust is a multiplier: 88% of consumers say that when a company earns their trust it also earns a recommendation to friends and family.
More than half of airline and hotel customers — 52% — who switched brands did so because of a bad experience with a product or service.

Get personal

Consumers today seek personalized services tailored specifically to their needs and preferences. Like never before, they’re loyal to brands that provide a sense of community and affirm their core values. While this is particularly true for Gen Z and millennial consumers, other age groups are also increasingly leaving brands that don’t support the issues they believe are important.

Getting personalization right requires building on a framework of trust to assist that your customers feel comfortable sharing their personal data. With 82% of consumers willing to share some type of personal data for more personalized service, the challenge lies in convincing them that sharing that data will be worth their while.

Personalization is not a one-size-fits-all proposition. It can take a variety of forms:

  • Discounts and rebates on products customers use regularly: With inflation and an uncertain economic outlook to contend with, more than half of consumers (53%) tell us getting a good value for a product or service is the paramount reason for staying loyal.
  • Loyalty programs that offer flexible rewards: A “rewards my way” approach to loyalty programs lets businesses experiment with experiential loyalty to improve customer retention. With 52% of CM customers (61% for airlines and hotels) affirming the importance of flexible loyalty programs, it’s clear they respond positively to gaining special access to the items important to them.
  • Co-branded credit cards that deliver on benefits: Six in ten millennials belong to a customer loyalty program and 66% have a brand or retailer credit card, which influences online browsing (77%) and in-store shopping (79%).

Loyalty requires vigilance

Customer loyalty is up for grabs. With options galore at the fingertips of every consumer, a single bad experience is enough to drive them elsewhere. Actually, it doesn’t even have to be a bad experience with your brand. If another brand provides a better experience, boom; they’re gone.

So the pressure’s on to foster customer loyalty. From discounts on products they actually use to special access gained through loyalty programs, today’s discerning consumers are ready to share their personal data — and preferences — if you can assure them they will, in turn, receive the products, services and experiences they crave. In short, loyalty starts with trust — and requires ongoing vigilance.

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