In-Store News: Customer Loyalty in a Post-Recession World
By Sarah Hutchins
a special arrangement, presented here for discussion is an excerpt of a
current article from In-Store News,
a U.K.-based online news portal specializing in retail marketing and design
Retailers will need to
focus on keen pricing, rewards for loyalty and paramount customer service
to keep consumers happy in the post-recession world.
According to Experian’s
latest Insight Report, consumers are less loyal and more doubtful
about retailers than before. Additionally, more than 80 percent of shoppers
are increasingly aware of the price of goods and services. Both sentiments
are likely to stick around after the recession.
“In the post-recession
U.K. we are going to see the rise of the promiscuous, bounce-back consumer,
one whose loyalty has to be won and re-won every day,” says Future
Foundation planning director Joe Staton.
In the grocery sector,
U.K. consumers are already scaling back. A Nielsen study found 32 percent
of shoppers will continue to cut back on food expenses after the recession.
This focus on value has
decreased brand monogamy. Historically brand-loyal consumer groups are
demonstrating “volatile and promiscuous” shopping behavior.
“The recession will
mean different things to different people, but there are some things that
are certain,” says Bob Bayman, a director and partner of brand consultancy i-am Associates. “If you have customers, you must keep
It costs five times as
much cash to get a new customer as it costs to keep a current one, yet
Mr. Bayman says many retailers are more focused
on winning new shoppers than establishing loyalty.
Regardless of the economic
climate, he says, losing customers and spending extra money to try and
attract new ones is a waste of precious resources.
Experian’s report listed
three elements key to winning bounce-back consumers: Price, loyalty and
will be more price-savvy so brands will need to keep costs transparent,
highlight benefits and revisit all-inclusive and package deals.
your Family for a Fiver”
campaign and expanded Basics range with many £1 items has helped grow the
company’s like-for-like sales 4.5 percent. Already 70 percent of customers
buy into Basics, making it the chain’s fastest growing sub-brand this year.
Caring for a consumer
during the recession, however, will not guarantee loyalty later on. Reward
points schemes, personalized discounts and targeted one-to-one communications
will help establish customer allegiance.
will be able and willing to look for the best customer service experience
in addition to good value.
“True customer loyalty
comes out of an emotional bond,” says Mr. Bayman. “So
therefore think of building a brand that has character, human traits and
personality. This leads us to giving unconditionally without expecting
or talking about a deal.”
How might customer loyalty and retention change after the recession ends?
What strategies will best win back customers post-recession?