Brand loyalty depends on trust, emotional connection, survey finds

Loyalty is in decline. Customers form lasting connections with brands and products they love, but they’re still willing to shop elsewhere when price, value, and experience don't meet their expectations.

People are trading down as a result of supply chain issues, inflation, and price sensitivity over the last five years. But loyal customers still exist, and brands can reach them by building relationships rather than trying to undercut competition.

Most respondents (63.6%) think customers are less brand loyal than five years ago, according to a new survey from EMARKETER and Bloomreach.

• Declining loyalty is due in large part to intense competition (55.2%) and increased discounting/price sensitivity (47.4%), per the study.
• Retailers and travel/hospitality are significantly more likely than online and on-demand services to say that limited brand differentiation is a struggle, the study found.

“More retailers and emerging brands stepped in with lower-cost private label and dupe products, and they’ve been able to gain traction with consumers, especially among younger shoppers who turn more toward social media for product reviews, recommendations, and money-saving tips,” said EMARKETER Principal Analyst Sky Canaves.

Brands are left with two choices to build loyalty: Slash prices, causing slim margins to shrink even further and endangering product quality, or find a way to stand out from the competition.

“Consumers are getting smarter. They are aware of their options,” EMARKETER Senior Analyst Blake Droesch said on the “Behind the Numbers” podcast. Those higher expectations challenge brands.

• Consumers research products at least three times before buying, according to a survey from EMARKETER and impact.com.
• Shoppers who find products on retail websites and apps are likely to research the brand or product on a search engine (36.8%), visit a physical store (30.1%), talk to family and friends (24.6%), or look up the brand or product on social media (19.1%), EMARKETER research found.
• Customers are convenience-driven (53.3%), price-sensitive (46.8%), and deal-seeking (42.2%), according to Bloomreach and EMARKETER survey respondents.

To build lasting customer loyalty, you need to build trust. But before you can do any of that, you first need to understand your audience. “Brands need to ensure they have the right tools to analyze consumer data and tailor offers based on the individual customer’s history, behavior, and preferences,” said Canaves.

Brands see consumer spending as a better indicator of loyalty than any other engagement form. Seven in 10 (70.8%) marketers define loyal customers by spending over time, per the EMARKETER and Bloomreach survey. Loyalty program participation is the second most common indicator of loyalty (53.3%). For these brands, you can draw a direct line between a decline in loyalty and a decline in repeat spending.

Loyalty starts with understanding consumers. “Brands first need to ensure they have the right tools to analyze consumer data and tailor offers based on the individual customer’s history, behavior, and preferences,” said Canaves.

Once brands have that analysis, they can focus on delivering a customer experience that keeps them coming back through relationship-building factors.

Read the full report.

This was originally featured in the EMARKETER Daily newsletter. For more marketing insights, statistics, and trends, subscribe here.