Can consumer products companies afford to view consumer loyalty as a one-way street? Or are there really two sides to the loyalty equation: consumers showing loyalty to brands but also companies showing loyalty to consumers? Research shows it has to go both ways.
Loyalty programs have been around for several years now. It continues to be an important part of the marketing mix and you can hear more about it at the upcoming Shopper Insights in Action conference sponsored by IIR USA. Typically, loyalty programs are data-centric efforts aimed at reinforcing buying behavior by providing economic incentives to purchase again. But research indicates it should be much more than that.
A Wall Street Journal report yesterday cited loyalty as “fundamental to human relationships” with significant and far-reaching benefits such as better health for long term marriage partners, higher compensation for long-term employees, and a greater sense of well-being for those who consistently follow their favorite sports team. People have an innate affinity for loyalty.
Today, Booz & Co. reported on research regarding a profound consumer shift away from “mindless consumption to mindful consumption” with consumers increasingly purchasing from companies that meet their standards, share their values and show qualities such as “kindness and empathy”. In fact, the Booz report says this consumer shift toward companies that show kindness and empathy is “the biggest shift in any attitude that we have ever seen”.
The implications? With these studies in mind, companies should concentrate not only on the consumer side of loyalty but on their side as well. As the Booz article says, “Selling to your customers will require investing in your customers. Generosity opens up networks, provides access to talent pools, and creates future customers. The vanguard companies understand that showing kindness and humanity is now a competitive advantage.”