Price Tops Loyalty for British Consumers
Consumers chase prices before considering other benefits, at least in Great Britain, according to a recent study conducted by YouGov. The study, sponsored by Catalina Marketing, indicates that reward point programs--a staple of current business practice--are effective, but not as much as companies might hope.
Not surprisingly, the biggest influence on what brings customers back to the same retailer is discounted prices, cited by 40 percent of respondents as the most persuasive factor. Just behind discounts were the buy-one-get-one-free offer and its kin, with 35 percent of respondents naming such sales the most important influence. Earning loyalty/reward points was the persuasive factor just 10 percent of the time.
Further illustrating the importance of price, the YouGov study shows that 64 percent of respondents chose price as the factor that would keep them coming back to a particular store, winning out over convenience and locality (54 percent). Brand was a much smaller factor in the decision, according to the report. "Surprisingly, only 12 percent said that a retail brand was the main influence when choosing a particular store, reinforcing the importance of price perception compared to brand loyalty," the report states.
Respondents even preferred price-related rewards when rating loyalty program benefits. About half of respondents (45 percent) preferred to receive coupons and savings vouchers from loyalty programs, compared with approximately 25 percent choosing the accumulation of points. A mere 2 percent favored being entered into a prize draw as the most desirable reward option.
Loyalty cards are popular in Great Britain: 66 percent of all adults one at least one or two cards, with higher ownership rates among those aged 50-plus. Over 50 percent of respondents showed interest in loyalty cards for convenience stores, pharmacies, carryout restaurants, and other retailers where such programs are less common. Broken down by social grade, YouGov discovered that managers, opinion leaders, and administrative workers are more likely to be card-carrying loyalty program members than are manual workers and the low waged/unwaged. "This is surprising as generally it is presumed that the more affluent are less price-sensitive," the report states. "Perhaps, the more affluent demographic have greater mobility and therefore, more choice of retailers to shop with, consequently owning more loyalty cards."
The survey results indicate a difference between customers want and corporate perceptions, if extrapolated to a larger scope. This is especially clear in light of the Strativity 2005 Customer Experience Management Study reported February 14 on destinationCRM.com. Key findings of Strativity's study showed that many executives in the United States (87 percent) do not know the average annual value of a customer; that only one-third believe employees have the tools and authority to serve their customers; and 54 percent of senior executives claim they don't deserve the loyalty of their customers. The Strativity study, not surprisingly, is subtitled, "No Money, No Love."
You Want Customer Love? Then Talk to Them
Consumers Will Switch, Not Fight
Is Your Product Really That Great?