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Products, services or experiences: What do customers value most?

Traditional loyalty programs haven’t been attracting customers for the reasons companies think.

Overview

Consumers evaluate providers foremost on the experience that company provides, more so than on the company’s loyalty program, or even its products or services. It’s time for companies to acknowledge that loyalty is neither permanent, nor under their control. Companies don’t “own” loyalty; they simply have it on loan for short periods of time, from one interaction to the next. Digital has confirmed the need to delight or surprise customers on an ongoing basis. Every experience makes a difference. And satisfying experiences, delivered over time, are what build long-term relationships and drive profitable growth.

Key Findings

Digital has revealed that what truly drives loyalty is the quality of the experiences customers have before, during and after a sale. Their loyalty to an experience, as opposed to a company or product, is evident in a number of Accenture’s research findings:
  • Sixty-five percent of consumers use online channels—not primarily for price advantages, but for convenience, speed, the quality of information provided, and access to a broader range of choices

  • Sixty percent find "being promised one thing and delivered something else" the most frustrating experience they can have with a company

  • Sixty-five percent (nearly 80 percent in emerging markets) have switched at least one provider in the past year because of poor service

  • Eighty-two percent of "switchers" believe companies could have retained them with better experiences and more accurate expectations.

Recommendations

To drive loyalty in the digital age, companies need to:

  • Deconstruct their existing loyalty programs. By evaluating the effectiveness of the entire program, companies can decommission low-value program elements and use funds for new capabilities.

  • Focus on experience, not discounts. Companies should design a new experiential loyalty model using exclusive access and experience, and ensure that the value propositions deliver on the brand promise.

  • Integrate loyalty programs with end-to-end customer experiences, taking every customer interaction into account when assessing the loyalty of an individual customer.

  • Expand the eco-system of loyalty partners. Companies should establish trade partnerships with organizations that offer complimentary offerings and channels to increase the impact, relevance and exclusivity of their value propositions.

  • Make loyalty an enterprise objective. Companies need to define loyalty metrics that are relevant and meaningful to every function in the organization and orchestrate accountability.