Article by Sarah Richardson, Chair, Australian Loyalty Association
The latest Consumer Trends Index report by Marigold provides data-driven insights to support Australian and New Zealand marketers to better understand consumer attitudes, trends, communication preferences, loyalty drivers, and ways to increase market share. With significant disruptions to consumer behaviour globally over the past three years, this report details why building long-lasting relationships with consumers is crucial for brand success as well as the need for it in challenging economic times. With loyalty on the rise and consumers willing to pay more to shop with preferred brands, proactive marketers can use this report to revamp and reassess their relationship marketing strategies to better align with customer loyalty, needs and growth.
Despite the plethora of channels available to consumers, email is still the number one driver of sales, up by 8 percent year-on-year from 2022. 64% of consumers say they made a purchase directly from an email they received in the last year. If further proof was needed that relationship-based marketing outperforms other forms of marketing to convert sales, consumers voted definitively, email outperforms banner ads by 178%.
Continuing the upward trend towards the benefits of relationship marketing, the research shows that adding relevance, value and personalisation are key to engaging your customers, with 83% of consumers wanting to be rewarded for their loyalty, and 79% wanting brands to strive to build a relationship with them. Both of these measures are impossible to achieve if brands continue to use channels that only allow one off sales, and fail to understand individual customers over time.
Personalisation is only possible with information accumulated over time through a consistent relationship with your customers. Consumers remain increasingly frustrated that brands continue to communicate irrelevant content and offers, with 60% citing this as their number one frustration in relation to the communication that they have received in the last six months.
Surprisingly, two-thirds of consumers in Australia and New Zealand say they will pay more to buy from their favourite brands despite the increased cost of living. In fact, consumer insecurity has seen a 5% increase in consumer loyalty to specific, trusted brands.
Research from other sources, including the ALA 2022 Annual Loyalty Insights Report, corroborates the findings of Marigold’s Consumer Trends Index, showing that loyalty program participation is on the rise in Australia and New Zealand. Millennials, used to the complexities of the digital world, love their favourite loyalty programs more than any other generation. Consumers see the great benefits in participation in loyalty programs, saying that they are 44% more likely to take part in a loyalty program than they were last year.
Consumers are also wanting loyalty programs to go beyond discounts, points and rewards, although brands need to supply these as the core of their programs. This trend is shown by consumers’ increased interest in benefits such as relevant product suggestions, product sweepstakes and commitment to community, with the latter up by a whopping 44% year on year.
Customer data, so essential in allowing brands to provide all the above consumer desires, is still seen as something that brands need to earn. If you want your customers’ personal and preference data, you need to offer something tangible in return. Loyalty points, the core of many programs, come up as the most likely reasons for consumers to give companies their personal data, with 52% saying that these points are so highly valuable to them, that they are worth the exchange of their personal and shopping data.
The Marigold Consumer Trends Index shines a light on the growing value of relationship marketing and of loyalty programs, which in many cases, allows these relationships to blossom in the fickle world of consumer purchasing. Monetary concerns are going to bring financial hardship to the lives of many consumers in Australia and New Zealand, and 65% of them say they are ‘very pessimistic’ about the rising cost of living. Over half of those surveyed say they will be making less impulsive purchases in the coming months, a very compelling reason indeed to encourage companies to ensure that it is their products and services that will win in the hearts and minds of consumers.