The fifth edition of the State of the Connected Customer report from our partner Salesforce provides some very insightful data on the changes taking place in consumer relationships. The study, which interviewed 17,000 B2B buyers and end consumers, highlights recent events such as the global pandemic and the supply chain crisis and their impact on interactions between brands and consumers. Other trends, such as digital-first experiences, personalization at scale, data protection regulations and the growing popularity of asynchronous channels, have also contributed to changing the relationship between companies and consumers.
At redk we have put together architect database a series of four articles to address each of the four chapters into which the Salesforce report is divided and explore its conclusions. This week we focus on chapter 3:
“New realities that put brand loyalty to the test”
The relationship between customers and brands faces new challenges
Salesforce research shows that consumers are spending more and more time online. Their lifestyles and economic circumstances have changed, which in turn has led to a shift in their priorities. This situation makes it harder to retain digital-first customers, something that becomes clear when you look at some of the rather alarming data collected by Salesforce. For example, 71% of consumers switched brands at least once in the year prior to the study.
Salesforce: “There are thousands of additional factors that induce consumers to abandon their usual brands in order to switch to others that offer them better conditions.”
The reasons that lead consumers to make this decision include differences in quality, availability and customer service, as well as greater alignment between the brand's values and their own. At a time when customer loyalty has been irreversibly disrupted by the COVID-19 pandemic, brands must redouble their efforts in all areas of customer service if they do not want to be destroyed by this new reality.
Loyalty programs are still important, but they need to change
According to the Salesforce report, there are certain basic patterns of consumer behavior that have not changed. One of these is their interest in loyalty schemes. However, despite the fact that consumers participate in an average of 4.3 such programs, many do not do so actively and do not redeem rewards frequently, if at all.
31% of consumers redeem accumulated points once a year, less than once a year, or never.
Still, loyalty programs can still play a key role in customer loyalty, provided they are modified to adapt to this new reality. They need to be more accessible and remove barriers to redeeming rewards. In fact, 61% of consumers surveyed say they would use loyalty programs more often if they could get rewards automatically. As we saw in the second article in this series on the State of the Connected Customer, personalization is at the forefront of new consumer expectations, and it is key here too: 55% say they would use loyalty programs more often if they could get personalized rewards that fit their needs.
Brands are targeting consumers directly
The brands that are getting it right are doing so because they know how to meet the needs we have mentioned and because they are addressing consumers directly. Many of them are eliminating the middlemen to directly control their customers' experience and, in this way, take advantage of the opportunity to obtain their data. Although this is not a new model, it is becoming more common.
Salesforce’s 2019 study found that 49% of consumers buy directly from brands. In the 2022 study, this percentage is 64%.
While consumers still appreciate the perks that retail offers, including customer service, rewards and return policies, Salesforce says they are now more attentive to brands to ensure their products are authentic, unique and sustainable.
