No love lost – 80 per cent of UK brands not rewarding customer loyalty

UK brands and retailers are failing to covert one-time buyers, some pushed online for the first time during lockdown, into frequent purchasers through a lack of loyalty programmes and personalised content, according to data from dotdigital, the leading omnichannel marketing automation platform.

Original research in the Hitting the Mark report, which benchmarks the digital marketing tactics adopted by 100 global eCommerce brands, shows that despite the rising cost of customer acquisition, 80 per cent of UK brands and retailers haven’t adopted a loyalty programme into their customer marketing strategy, missing a key opportunity to create the emotional connection necessary to drive customer lifetime value.

43 per cent of brands fail to collect key customer data, such as date of birth, at the earliest stage of acquisition, meaning retargeting strategies lack the personalisation needed to drive ongoing engagement. This comes at a time when customers’ expectations have been elevated by the Covid-19 lockdown as shoppers had time to make more considered purchases and, the more brands did for them during the difficult times, the more customers have come to expect.

39 per cent of shoppers say it now takes five or more purchases before they consider themselves loyal to a brand. However, once loyal, 35 per cent of consumers will spend more with a brand even when there are less expensive options elsewhere and 56 per cent will refer a brand to their friends and family.

One answer to the challenge of keeping a customer coming back to push past the five-purchase threshold is the development of a personalised loyalty programme built on customer insight and data, as Mark Jervis, marketing director, at dotdigital explains:

“Creating a loyalty programme that is as thoughtful, delightful, and on-brand as the rest of your customer experience is a key pillar of a customer-centric marketing strategy, enabling retailers to make customers feel valued. Retailers should move beyond the traditional ‘points for purchase’ model and tailor their programme to build an emotional bond based on customer insight. Shoppers want to earn credit by taking actions other than making a purchase, so offer points for reviews and interactions with their social channels.”

Post-purchase, customer reviews increase shoppers’ trust in a brand, giving a greater incentive to return. Currently, 60 per cent of UK brands request post-purchase reviews and over half of them use an independent platform to power these requests which is important as customers are more inclined to share their experiences via a third-party platform.

“Globally, the UK leads the way in omnichannel marketing, with retailers scoring highly against key success metrics when compared to other markets.  However, despite these advances, retailers and brands are still missing opportunities to get closer to their customer by not embedding loyalty into their selling strategies. Therefore, retailers are losing out on a significant chunk of revenue potential in the market and customer loyalty remains fickle,” concluded Jervis.

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