Customer loyalty: it’s what every customer needs a reason to give, and what every institution strives to achieve. And it seems Brits believe supermarkets are indeed super when it comes to rewarding their loyal consumers, as latest research from Mintel reveals today, three quarters of all consumers believe supermarkets are either "good" or "very good" at rewarding their customers.
When asked which organisations are best at rewarding loyal or valuable consumers, either in terms of financial reward or better service, almost three quarters (72%) of all Brits rated supermarkets as "good" or "very good". The supermarkets' next nearest rivals were mobile phone providers, with 36% rating them as "good" or "very good" at rewarding loyal customers and some 33% said the same of coffee shops and restaurants.
Meanwhile, just a fifth (20%) of consumers felt that banks were good or very good at rewarding customer loyalty, while this dropped to 14% of credit card companies.
Toby Clark, Senior Financial Analyst at Mintel said:
“Supermarkets are, by a very long way, the firms which are most likely to be seen as being good at rewarding their loyal customers. In fact, five times more consumers rate supermarkets as being ‘good or very good’ at rewarding consumers than credit card companies. In a fairly damning indictment for the financial services industry, banks, insurers and credit card companies were eighth, ninth and tenth out of the ten types of firm listed.”
In Mintel’s research, banking consumers were asked about their definition of what constitutes loyalty. Three quarters (73%) of consumers (who had a main bank) agreed the length of time a customer has been with a bank was the most important way of measuring customer loyalty, while only one in ten (9%) agreed it was down to the number of products held with the bank. Meanwhile a fifth (18%) believed the value of the accounts held with the bank was the most important factor.
“Our research points towards a fundamental mismatch between consumers and the firms serving them. On the whole, bank loyalty bonuses are based on product holdings. Firms offer discounts when customers take out new products, or offer exclusive deals to customers with existing, high-value accounts. Yet consumers, on the other hand, overwhelmingly see loyalty as being about length of service and not product holdings.” Toby continues.
Ironically, while banks fare poorly by consumers in terms of rewarding customer loyalty, when it comes to their relationship with their main bank, consumers show themselves to be extremely loyal, at least in terms of time.
Today, more than half (56%) of consumers say they have been with their bank for more than a decade. Just under a quarter (22%) have been with their provider for 4-9 years, while 16% had been with them for 1-3 years. Just one in twenty (6%) have been with their main bank for less than a year.
“While consumers feel that supermarkets reward loyalty, this loyalty certainly is not reciprocated as barely anyone limits their food shopping to a single store. And the same is true of mobile phone consumers. Interestingly, while mobile phone companies are judged to be better than any of the three types of financial firm at rewarding loyalty, as many as two fifths of mobile owners have switched networks within the last two years – a marked contrast to, say, the current account market, where most people have held their account for at least a decade.” Toby concludes.
Finally, when asked why consumers stay loyal to their main bank, familiarity with the way the bank works (45%) is the number one reason for customer loyalty. While four in ten (41%) Brits rate good overall standards of service as being a reason why they remain loyal to their main bank, the same number of consumers state the importance of convenient branch locations.
Almost four in ten of us (39%) say it is just too much hassle to switch. Just 10% stay with their main bank because they believe they get better treatment or a better deal for being a loyal customer.
Please visit http://www.mintel.com/ for more information
Source: Mintel Oxygen Reports
UK - June 2011