Why Consumers Change BrandsDecades ago, a major cigarette brand won a lot of attention with the tagline “I’d rather fight than switch.” Today, U.S. consumers are switching brands to the tune of $1.3 trillion, and marketers appear to be swinging back with empty gloves.
According to the recently released Accenture Global Consumer Pulse Survey, 51 percent of U.S. consumers switched their retailers, banks, cable companies and other service providers in 2013. That is up 5 percent from 2012, and it represents $1.3 trillion in lost sales to the dropped brands.
Worse, to a loyalty marketer like me, is that only 18 percent of those surveyed said they feel like their service providers offer them tailored experiences. As the report states: “The gap between the use of digital technologies and the ability of companies to use them to improve customer experiences is highlighted by the survey’s findings that, among the 10 industries covered by the report, none made noticeable progress in providing customers with a tailored experience in 2013.”
Not surprisingly, then, that the rate of loyalty among those surveyed consumers rose just 1 percent in the year, while their likelihood to recommend a brand rose 2 percent.
These are troubling numbers, but it does not mean we loyalty marketers are down for the count. Rather, we should take these stats for what they are: an alarm bell. The loyalty marketing industry invests billions of dollars in personalization technologies, yet 82 percent of people do not think they are provided relevant experiences.
Something is breaking down, and I suspect it is in that pipeline that runs between acquiring the technology and deploying the experience. The data insights are not being used to woo and wow the customer, but to craft eye-catching promotions that are relevant only to the expiration date.
Companies tend to default to price as competition heats up, but you can only cut so far before hitting bone. To prevent the switch, brands should sprinkle their price tactics with some true personalization, which can be achieved through analysis of customer data. Why not try to create a brand experience that stands apart, based on what you know about customers?
I’m not sure how dire the situation is and how far we are going to have to go to really push the metrics upwards, but it’s a complete miss if we are not taking advantage of the investments we make in this area. I’ll underscore the point with another finding from the research: 51 percent of those surveyed said they expect specialized treatment for being a good customer.
As marketers, that is an expectation we should fight for.
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