Customer loyalty is essential for building a successful business. Every business owner wants loyal customers, but how do you encourage loyalty?
Synchrony, a leading provider of retail credit programs for businesses nationwide, examined the topic in its 2019 Loyalty Study. They conducted an online survey of 1,500 consumers with questions designed to probe the psychology, motivations and emotions of shoppers. Responses were weighted to U.S. demographic factors such as income, education, geography and ethnicity.
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Synchrony is a premier consumer financial services company delivering customized financing programs across key industries including retail, health, auto, travel and home, along with award-winning consumer banking products. With more than $140 billion in sales financed and 80.3 million active accounts, Synchrony brings deep industry expertise, actionable data insights, innovative solutions and differentiated digital experiences to improve the success of every business we serve and the quality of each life we touch.
“Business owners tend to think consumers base their purchase decisions on logic alone,” said Katie Hughes, V.P. of Loyalty Strategy, Synchrony. “But consumers are not always motivated only by logical factors like price, value and selection. There are emotional factors, too, and our study revealed their impact on sales and loyalty.”
Forty-three percent of those surveyed identified trust as the primary driver of brand loyalty. For this survey, “trust” was defined as a consistent experience, honesty, transparency and reliability.
For retailers, the consumers’ focus on trust raises important questions. Can your customers trust your brand to be consistently excellent? Can you be counted on to stand behind your product or service? Will you do the right thing as a corporate citizen? Are you trustworthy in your business practices?
If you can answer “yes” to those questions and demonstrate them with your actions, then you begin to earn consumer trust and the loyalty that often goes with it. Failure to fulfill those ideals will diminish the trust factor and reduce customer loyalty.
Trust is not quickly earned, but it can be lost with a single bad experience or attitude. If your sales experience is inconsistent or customers get a hint of dishonesty, any trust you have built can evaporate almost instantly. Creating trust with consumers requires a commitment to values that begins at the top of your organization and extends to every employee.
Beyond trust, the next most important factors in customer loyalty are simplicity and convenience. Simplicity and convenience are defined as “a seamless shopping experience,” a simple and intuitive layout of the physical store and website, and “frictionless” checkout and product delivery. Convenient financing programs would be part of a frictionless purchasing process.
“The results of our survey reveal that consumers may be driven by either right-brain or left-brain thinking,” stated Hughes “The left lobe of our brain tends to focus on analytical and methodical thinking; the practical issues like price and value. The emotional aspects of our behavior are typically centered in the right lobe. Both sides are involved in decision making, but which aspect dictates loyalty, whether the practical or the emotional, depends on the personality of the shopper.”
For left-brain consumers, price, value and selection are huge motivating factors. Right-brain shoppers want to be loyal to a brand if the loyalty is deserved and demonstrated by action over time. So, can both approaches to loyalty be satisfied?
“Absolutely,” said Hughes “There are many examples of retailers or service providers who offer great value and convenience but also win trust by developing a strong, consistent brand image with their integrity, social involvement and personal service. These are the businesses that win over the long term because they have loyal customers.”
How important is trust in the consumer’s mind? The survey indicated that 50 percent of shoppers would change stores if they lost trust in the brand.
Other loyalty drivers included shared values (7 percent), recognition/belonging/enjoyment (tied at 6 percent each), inspiration/excitement (tied at 5 percent) and prestige (3 percent).
The Synchrony Emotion-Based Study was conducted from November 2018 through February 2019.