UK brands let new shoppers go due to loyalty failings

UK brands and retailers are failing to keep hold of the huge influx of new online customers who have made a purchase during the coronavirus pandemic, simply because they do not do enough to convince them to buy again.

So says a new study from Dotdigital, which claims there are three major issues when it comes to retaining new customers: four-fifths (80%) of UK brands neglect to reward customer loyalty; over two-fifths (43%) overlook the key customer data necessary for personalised messaging; and 40% fail to publish post-purchase reviews.

The “Hitting the Mark” report benchmarks the digital marketing tactics adopted by 100 global ecommerce brands and shows that, despite the rising cost of customer acquisition, UK brands and retailers are missing a key opportunity to create the emotional connection necessary to drive customer lifetime value.

Brands fail to collect key customer data, such as date of birth, at the earliest stage of acquisition, meaning targeting strategies lack the personalisation needed to drive ongoing engagement.

As the study points out, customers’ expectations have been elevated by the Covid-19 lockdown as shoppers have had time to make more considered purchases and, the more brands are doing for them during these difficult times, the more customers have come to expect.

Nearly two-fifths (39%) of Brits say it now takes five or more purchases before they consider themselves loyal to a particular brand. But while hard to gain, loyalty brings major benefits; 35% of consumers will spend more with a brand even when there are less expensive options elsewhere and 56% will refer a brand to their friends and family.

Dotdigital marketing director Mark Jervis said: “Creating a loyalty programme that is as thoughtful, delightful, and on-brand as the rest of your customer experience is a key pillar of a customer-centric marketing strategy, enabling retailers to make customers feel valued.

“Retailers should move beyond the traditional ‘points for purchase’ model and tailor their programme to build an emotional bond based on customer insight. Shoppers want to earn credit by taking actions other than making a purchase, so offer points for reviews and interactions with their social channels.”

In fact, the study claims that customer reviews increase shoppers’ trust in a brand, giving a greater incentive to return. Currently, 60% of UK brands request post-purchase reviews and over half of them use an independent platform to power these requests.

Jervis added: “Globally, the UK leads the way in omnichannel marketing, with retailers scoring highly against key success metrics when compared to other markets. However, despite these advances, retailers and brands are still missing opportunities to get closer to their customer by not embedding loyalty into their selling strategies.

“Therefore, retailers are losing out on a significant chunk of revenue potential in the market and customer loyalty remains fickle.”