The New Reality of Loyalty

What is loyalty for customers today ?

Loyalty is key – more than 90% percent of companies currently employ some form of customer engagement or loyalty program. This is even more relevant in the luxury industry where customers who matter most are the spending loyalist.

With the rising importance of digital touchpoints and the generation of Millennials as the growing customer base, loyalty is increasingly harder to decode and needs to be rethought.

This year, Accenture surveyed over 25’000 consumers in 33 different countries to understand the new reality of loyalty. It shows interesting results that can empower luxury companies to see beyond the loyalty illusion and invest more wisely.

First, millennials’ values and behaviours set them apart. 30% of them say companies can try to earn their loyalty, but they won’t accomplish anything. However, 72% are willing to pay a higher price to ensure higher level of quality.

Second, every customer today is a digital customer, with differences in intensity, but all companies need to pivot to a multispeed digital solution to accompany every customer. Even the most traditional customers now crave for more digital interactions.

Source : https://www.youtube.com/watch?v=Bej2f0aFO1k

Third, many companies are still not covering the basics. For at least 10 years in a row, 61% or more consumers have switched due to poor service. 80% of customers have been unhappy about having to contact the company multiple times for the same reason and finally 74% or more consumers have found companies to have unfriendly business policies such as inflexible return policies or poor warranty.

Finally, the Switching Economy continues to reach significant levels. This is even more relevant for young customers with high income, the new targets of many luxury brands!

Luxury brands must understand that customer attitude and expectation towards loyalty is changing. With the rise of Millennials, the increase demands for tailored customer service and digital savvy customers, luxury brands must rethink their approach on loyalty. Focusing on multichannel high quality customer care and top notch personalized service is key to retain today’s and tomorrow’s customers.

Source Image à la Une : http://bit.ly/1LEtKrS

Authors : Vanessa Zeilfelder (Accenture Management Consulting) and Axel Robert-Tissot (Accenture Management Consulting).