In today’s world, it is incumbent on marketers to form stronger relationships with their customers as loyal customers are more likely to purchase again — lowering the cost of repeat purchases and increasing their lifetime value.
Creating a more loyal audience can also boost revenue and insulate the business against market fluctuations and competitive threats.
But you knew that already.
What you might not know are the insights we’ve unpacked with Intuit Mailchimp during a trilogy of stories (of which this is the final instalment). For instance, one of the biggest drivers of customer loyalty is not creating a die-hard level of fandom. Instead, removing barriers to purchase is in many cases far more effective.
What’s more, to create truly loyal customers, brands need to make the synapses fire in the different parts of a consumer’s brain. That means they need to hit the primordial reptilian brain that deals with feelings like familiarity or the brand new (in evolutionary terms, of course) neocortex that brings order to the chaos of stimuli that surrounds every single purchasing decision that they make.
This time, we’ll dive back into Mailchimp’s deep customer research to discover what makes consumers tick in different parts of the world. Your consumers matter just as much regardless of whether they’re in Melbourne, Manhattan, or at the foot of the Matterhorn. That research came from a Canvas8-conducted panel-sample online survey on behalf of Intuit Mailchimp between 17-27 February 2024 consisting of 4,000 respondents (1,000 from Australia, Canada, the UK, and the US aged between 18 to 65). The margin of error is +/- 5.5 per cent, as reported at a 95 per cent confidence level.
Loyalty Is Universal…
It should not be surprising that a significant majority of consumers around the world prefer to buy from businesses that they feel loyal to — 66 per cent of Brits, 67 per cent of Aussies, and 71 per cent of Americans and Canadians. For what it’s worth, six per cent of Canadians and Americans, eight per cent of Brits, and nine per cent of Aussies have no preference when it comes to buying from brands that they feel loyal to.
What’s more, 70 per cent of Aussies and Brits, 71 per cent of Americans, and 72 per cent of Canadians believe that it’s important to buy from the right brand. By contrast, seven per cent of Canadians and Americans and eight per cent of Aussies and Brits don’t believe it’s important.
Mailchimp and Canvas8’s research shows that consumers not only look for more from the brands that they interact with but also that they actively want to form a connection with the brands they buy from.
“Loyalty is an active preference. If I’m loyal to something it means I’m deliberately choosing to be loyal to that brand or product for reasons other than its utility,” said Bri Williams, a behavioural expert and founder of People Patterns.
“Social currency and identity are really important aspects for customer loyalty,” she added.
“People ask themselves, ‘What does it say about me if I proclaim myself loyal to this business?’ Often the brand ends up being a conduit for how I see myself and how I want the world to see me as well.”
“We’re seeing a rise in purpose-driven consumers. These types of consumers will be picky about where they’re shopping regardless of the product type and instead focus on the brand, what it stands for, and whether or not it aligns with their own values,” said Line-Ariel Bretous, founder at 1 LAB Consulting, behavioural scientist and customer experience expert.
That lines up with Mailchimp’s research, too. Gen Z is far more interested (24 per cent) in buying from brands that they have a connection with than the rest of the population (18 per cent). The same goes for brands that make Gen Z “feel good” (44 per cent) compared to 42 per cent of 25-34-year-olds, 40 per cent of 35-44-year-olds, 35 per cent of 45-54-year-olds, and just 27 per cent of people older than 55.
This way of thinking comes from the particular Gen Z desire to avoid having to deal with the mental discomfort that comes from harbouring views or beliefs that conflict with our actions. For marketers, recognising and planning long-term around this trend could have serious benefits for your brand’s health and future sales success.
“Brands have to consider how they are making people feel from beginning to end. I don’t know that we could separate a great customer journey from emotional loyalty,” added Bretous.
That idea is a powerful force that brands can tap into, particularly as consumer preferences change. With that being said, these changing consumer preferences are a trend, rather than a constant in customer loyalty. So while brands should look to harness the more purpose-driven consumers, building familiarity and a buying habit among consumers will have the greatest impact on loyalty.
…Apart From When It Isn’t
While there are broad similarities across these four (largely) Anglophone countries, there are some finer points that are worth marketers paying attention to — some can be attributed to cultural differences, others to the nature of each country’s retail market.
For instance, 43 per cent of British consumers will simply buy the same product from another brand if the brand that they prefer is not available but in the US, just one-third of customers would purchase the same product from another brand.
Similarly, while just under a quarter of customers in each country would visit a different store to buy from their preferred brand, only 17 per cent of Brits would wait until a product from their preferred brand is available to buy compared to 26 per cent of Canadians. In fact, some 34 per cent of British consumers say that the most important thing for them when choosing a brand is making it “quick and easy” to purchase. Just over a quarter of Americans and Canadian consumers agree.
This points to one of the most crucial aspects of creating a loyal customer base — the need to make things feel easy and safe to make purchasing decisions habitual is just as important (if not more so) than the need to create feelings of a community around your brand.
“Most purchases are triggered by the category, not by the brand. So, ‘I’m thirsty, I want to buy a drink.’ A lot of what we’re talking about when it comes to inspiring loyalty is actually building habits, and that’s [about] us making it easier [for] people to keep on thinking about [the brand] at the time of purchase and to not go to somebody else,” said Adam Ferrier, co-founder of Thinkerbell.
“There are very powerful explanations for very complex behaviours that proceed from very simple bases,” added Dr Cyrus McCandless, a neuroethologist studying goal-directed behaviour and decision-making.
“There are many things that look like loyalty that go out the window as soon as that product isn’t on the shelf where the consumer expects it to be.”
There are other, finer points borne from Mailchimp’s research into the topic. For instance, while around half of consumers in the four studied countries agree that brands should reward them with special deals and discounts (58 per cent in Canada, 52 per cent in the US, 50 per cent in Australia, and 49 per cent in the UK), the strength of the feeling varies across geography.
For example, while between three and six per cent of all surveyed consumers strongly disagree that they expect that brands should reward them, 23 per cent of Canadians and Americans strongly agree that they expect brands to reward them. Meanwhile, just 15 per cent of British consumers feel strongly about brands rewarding them.
Still, marketers should not underestimate the value of a reward now and again.
“I think what really is missing is the surprise and delight element of loyalty from intermittent rewards. Perhaps it’s the unexpected voucher that just pops into your inbox that you haven’t had to earn. Those are the sorts of things that customers remember,” added Williams.
Squaring The Loyalty Circle
Here are several simple things that marketers need to bear in mind when considering how they present to, talk to, and reward customers.
First, by building familiarity and a sense of safety around your brand, you can build habits. As Williams told us before:
“Loyalty can fluctuate and dissipate. But if you concentrate on building habits, people might not be conscious and deliberate advocates for you but it doesn’t matter because they’re in your ecosystem and they can’t break out of it.”
Second, understand that the biggest impediment to brand loyalty is not a sudden reconsideration of your brand’s image, it is often availability.
As Richard Shotton, author of The Illusion of Choice explained to us previously, Nobel prize winners Daniel Kahneman and Richard Thaler believe that we overestimate the impact of appeal, we underestimate the impact of friction.
However, there are still plenty of other behavioural nudges that can separate the best marketers from the rest of the industry. For instance, email is by far the most popular channel for brand communications — regardless of where you are in the world or whichever customer segment or demographic you’re talking to. Combining a smart messaging strategy with the occasional reward can have big benefits.
Finally, it not only makes marketing sense to build a loyal customer base, it makes business sense, too. Building a defensible, reliable customer base is one of the surest ways to see off economic headwinds, market changes, and other unpredictable or out-of-your-control factors.
“Loyalty isn’t just a marketing goal — it’s a comprehensive business strategy. It demands collaboration across all facets of the company to enhance the complete customer experience,” said Denise Lee Yohn, author of What Great Brands Do: The Seven Brand-Building Principles that Separate the Best from the Rest.
