Rising costs hurt customer loyalty, providing opportunity for brands
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While most US consumers are more likely to buy from brands with good loyalty programs, according to Bond, 58% of those ages 18 and older told Dynata they’re less loyal to brands due to rising costs. And 65% of consumers had recently canceled memberships to cut costs as of Q1 2022, per PYMNTS.com and sticky.io.
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Beyond the chart: Cost-cutting will not bring an end to brand loyalty. In fact, high prices can make loyalty programs even more valuable to consumers.
Brands can improve loyalty by adding membership tiers, as Netflix did in October with the launch of an ad-supported plan. Another approach is to expand program features, the way Amazon did by offering Prime members more ad-free music. Partnerships, like the Delta Air Lines and Starbucks tie-up, also increase value for customers and brands alike.
More like this:
- Report: Retail Trends to Watch for 2023
- Article: To keep customers coming back, brands need to rethink their loyalty strategies
- Article: The key to the battle between privacy and personalization? It’s in the hands of the shopper
Methodology: Data is from the June 2022 Dynata report titled "Global Consumer Trends Report: The Economic Crossroads." 11,056 adults ages 16+ were surveyed online in 11 countries during April 29-May 9, 2022. The sample was quota-controlled to reflect the population on age, gender, and region. At least 1,000 respondents were surveyed from each of the following countries: Australia, Canada, China, France, Germany, Italy, Japan, Netherlands, Spain, the UK, and the US. Data is also from the June 2022 Bond report titled "The Loyalty Report" in partnership with Visa. Approximately 17,000 US consumers were surveyed each year of the survey. Data is also from the May 2022 PYMNTS and sticky.io report titled "Subscription Commerce Conversion Index." 1,919 US consumers were surveyed during February-March 2022.