Customer Loyalty Wanes as Experience Gains Momentum

Customer Experience
Customer Experience
Consumers are more likely to do business with brands that cater to their experience needs, diminishing the power of customer loyalty in today's market.

Personal relationships are built upon love, trust, and loyalty. But, for many companies, the customer's love and trust in their products no longer guarantees they'll remain loyal to the brand for life. Instead, customer experience has becoming the dominant deciding factor for many consumers, as they opt for flexibility and superior service.

According to Harris Interactive's latest study, conducted on behalf of inContact, consumers are making fewer buying decisions based on brand loyalty, and more on which companies can match their desired experience at the time of purchase. The survey, which polled 2,191 U.S. adults aged 18 years and older, found that, while 88 percent of respondents are satisfied with their customer service experience today, most still expect brands to offer numerous flexible customer service options, and the ability to contact the company via a variety of channels, for multiple methods increase brand satisfaction.

The following statistics highlight loyalty's fading presence in today's market and the increased power behind the customer experience:

  • Overall, 89 percent of U.S. adults would want to be contacted proactively by a company.
  • Of those respondents, 72 percent want to be contacted about fraudulent account activity, 58 percent welcome notifications about account changes, and 50 percent are open to being contacted about questions regarding an order they placed. Eighty-five percent prefer these proactive messages to arrive via email.
  • Fifty-six percent of those polled would be at least somewhat likely to switch to another brand or company if this new brand or company offered more options to connect with them.
  • While 75 percent of U.S. adults feel loyal to any type of company, the most popular industries with the greatest consumer loyalty are retail store brands (41 percent) and automobile brands (40 percent). Only one-third of respondents feel loyal towards electronics or technology brands.
  • One quarter of those consumers polled don't feel loyalty toward any type of brand at all.
  • Eighty-six percent of respondents expect brands to offer multiple options and flexible timing to interact with customer service, with 82 percent agreeing that the ability to contact the company via a variety of methods increases brand satisfaction.
  • According to 68 percent of those polled, companies and brands need to find ways to offer more customized interactions, such as sending texts about low balances, to increase their satisfaction.
  • Sixty-three percent of U.S. adults feel that brands that fail to offer communication options other than 1-800 numbers appear outdated or old-fashioned.

Key takeaway: Based on the fact that 47 percent of U.S. adult smartphone owners find themselves using their devices more and more for customer service, it's no wonder that that apps for mobile devices (70 percent) and SMS text messaging capabilities (67 percent) are important methods of communication for companies to employ. Primarily driven by younger consumers, ages 18 to 44, this move toward mobile highlights the influx of information and choices to which this demographic has become accustomed. These highly connected consumers want tailored experiences and more flexible options so they can conduct these interactions at a time that's most convenient for them via the channel of their choice. Companies that neglect to evolve alongside these changing customer behaviors and preferences run the risk of losing customers, which may be particularly damaging to a brand, as these young consumers hold the potential for significant lifetime value. Smart companies must quickly adapt to this changing landscape by putting personalized service experiences at the center of their customer strategies.