Quantifying Engagement's Impact on Buying Behavior

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While brand engagement and customer loyalty aren't always synonymous, highly engaged loyalty program members prove most profitable to the average company's bottom line.
Customer Experience

From quality to convenience, numerous factors influence long-term customer loyalty. Throw brand engagement into the mix, however, and customer value skyrockets, for even the most loyal shoppers purchase more from their favorite brands when they're highly engaged.

HelloWorld's recent "The Engagement Score" report examines the value of brand engagement and its influence on consumers' purchase decisions and loyalty. The two-phase study aimed to answer three critical questions:

  1. How can you objectively measure or quantify engagement?
  2. What is the impact of engagement on purchase?
  3. How does engagement impact loyalty?

Researchers embarked upon the first phase of this study by asking 936 respondents 50 questions on common ways consumers interact with their favorite brands. From this, researchers established the five most important factors of brand engagement-advocacy, social media, insights, communications, and promotions-and surveyed 4,755 consumers to explore these elements and gauge their perceptions with regard to their favorite brand.

The following statistics demonstrate the correlation between engagement and loyalty as they pertain to purchase decisions and buying behaviors:

  • Highly engaged consumers (70 percent) purchase their favorite brand most of the time, as opposed to their less engaged counterparts (56 percent).
  • When engagement scores improve from low to high within the retail industry, 21 percent more consumers shop their favorite store most or all of the time.
  • Increased engagement encourages 13 percent of occasional buyers to become more frequent buyers who purchase their favorite brand half of the time or more.
  • While fewer consumers dine at their favorite restaurant most or all of the time, 33 percent more consumers visit their favorite brand more frequently when highly engaged.
  • Though 56 percent of consumers are aware of their favorite brand's loyalty program, only 27 percent are members. Of those members, 72 percent purchase their favorite brand most or all of the time, while aware non-members only complete purchases 55 percent of the time.
  • While converting frequent buyers into loyalty members at all levels of engagement remains critical, those who are least engaged demonstrate the biggest jump in engagement post-conversion (19 percent).
  • Overall, consumers remain loyal to their favorite brand because of quality (57 percent). Price (17 percent), convenience (15 percent), and customer service (11 percent) also factor into the long-term loyalty mix.

Key takeaway: Engagement continues to play an important role in the formation of brand relationships, as loyalty often emerges from relevant communications and satisfying interactions. For example, engagement drives higher share of wallet and increased loyalty program membership. Thus, as brands seek to understand consumers' level of engagement, they must also aim to convert loyal frequent buyers into program members if they wish to boost revenue. By determining what truly resonates with consumers, brands can begin to offer targeted promotions and communications that focus on high value differentiators, such as quality and service, in order to draw shoppers in and increase conversions. The resulting relationships will enable currently loyalty levels to grow and blossom into long-term advocacy.

EXPERT OPINION
EXPERT OPINION