The strange tale of decreasing customer loyalty and the brand paradox
In an increasingly commoditized market like nowadays, few brands can actually distance themselves in from the competition in consumers’ eyes and minds. Currently, brand loyalty is a rare and precious advantage with which not many companies can truly boast. It is almost as hard to find as blue diamonds.
Even with access to an impressive amount of data, there is still no guarantee that after crunching the numbers, companies will automatically have better customer insights. What’s more, despite consistent and continuous financial efforts made to support innovative customer loyalty programs, they still fail to keep customers committed for the long haul. The famous 20/80 rule, meaning 20% of the customers generate 80% of the turnover, is a reminiscence of the past nowadays with numbers painfully declining towards a 50/50 percentage.
The truth is that customer loyalty is highly correlated with customer engagement, meaning that engaged customers will actively interact with your brand, they are more likely to buy again and even spend more than before, and most importantly, they promote it to their peers. In today’s hyper-connected world, people aren’t shy about sharing their opinions either. Therefore, your mission is to engage your customers throughout their lifecycle if you want them to advocate for you at every stage of your potential buyer’s journey.
Take for instance the banking industry. Recent studies support the fact customer attitudes, expectations and behaviors towards money, debt and their financial partners are undergoing dramatic changes. Therefore, banks find it harder each year to create meaningful experiences that keep customers interested throughout the journey. This is why consumers end up trusting brands less which leads to them switching their primary bank within 6-12 months, which is a lot faster than before.
So, how can banks keep their hard-earned customers and even increase their retention rate?
Our extensive marketing research experience has taught us that efficient customer engagement strategies focus on finding consistent ways to connect with customers while also considering their emotional and functional expectations. As long as banks continue to invest in obsolete strategies that don’t adapt to the changing customer landscape, they will lose valuable promoters of their brand to the competition.
One of our first recommendations is to start fresh with actionable insights that will deliver meaningful customer journey experiences. Consumer neuroscience does an amazing job at extracting those very hard to find: deep, accurate and unbiased insights on what customers truly desire and expect. By making use of cutting edge neuro-powered tools such as EEG, eye tracking, IAT coupled with experiential segmentation, a neuromarketing researcher is able to translate brain and biometric data into tailor-made solutions.
The comprehensive nature of our approach to customer engagement combines strategic thinking with deep expertise to reveal the exact type of experience that your customers have been looking for. The result? You build long-lasting emotional bonds with them. And if you’re still not convinced, remember that with just a 5% increase in customer retention your bank’s profit can augment with as much as 75%. Now that’s food for thought!
If you are curious to find out how neuroscience can increase customer engagement for your bank, then you will be interested to know that we are currently offering free assessments. Find out all about how we can help you on this page.