Engendering retail customer loyalty depends more on consistent marketing efforts than on creating seamless experiences, at least from the perspective of senior retail executives at large companies. That’s according to a recent study [download page] on “retentionomics,” from Forbes Insights and Sailthru.
Asked which internal barriers prevent individuals from becoming repeat customers of their businesses, retail respondents to the survey pointed first to the lack of consistent marketing and communication (51%).
The next-largest internal barriers to customer loyalty, per the survey, are the lack of seamless omnichannel/cross-channel shopping experience (40%) and the lack of modern, enabling technologies (40%).
Fewer cited the lack of personalization (27%) as a top barrier to customer loyalty. That may be in response to consumers’ attitudes towards in-store personalization tactics, many of which veer more towards “creepy” than “cool.” Still, a sizable share of consumers say that personalization influences their retail purchase decisions.
Perhaps more surprisingly, though, was the least-cited barrier to customer loyalty: poor or inconsistent customer service (21%). That was at the bottom of the list despite recent research indicating that almost half of consumers will abandon a company and move to a competitor within one day of having a poor customer service experience, given price and products of equal value. Additionally, a study released last year indicated that 53% of US customers had switched a service provider during the prior year due to poor service.
When media executives were asked the same question in the Forbes Insights and Sailthru survey, they put the lack of cross-channel reader experience (45%) at the top of the list of internal barriers to customer loyalty. The lack of modern, enabling technologies (35%) was next, closely followed by the lack of personalization (33%) and the lack of consistent marketing efforts/communication (31%). Interestingly, the quality of the website/mobile app user experience ranked last, in spite of indications that consumers value site performance over content and that most visitors will abandon a mobile site if it takes too long to load.
The study notes that there may not be enough attention paid to customer retention. While 8 in 10 executives believe that they’re exceeding expectations when it comes to acquisition goals, only 3 in 10 feel that they are surpassing their retention expectations. One of the chief obstacles to retention strategy is budgets: while executives were found to fairly evenly split their spending between acquisition and retention, the emphasis appears to be trending more towards acquisition. Indeed, 8 of every 10 retail and media executives surveyed said that their companies had increased their acquisition budgets in the past 1-3 years, while only 4 in 10 could say the same about retention budgets.
For retail companies, the top-2 barriers to investing more in customer retention are the inability to measure the ROI of these efforts (38%) and lack of buy-in from executives (36%). For media companies, the inability to measure ROI (45%) ranks second to the overall business model or strategy (47%) as a budget hindrance.
There are also some issues with metrics to be overcome. Although virtually all retail executives reported understanding their most valuable acquisition channels, fewer than half understand their most valuable retention channels.
The full report – which includes recommendations across priorities such as customer satisfaction, technology, resources and culture – can be downloaded here.
About the Data: The Forbes Insights and Sailthru report is based on a survey of 300 retail and media and publishing executives conducted in March/April 2016 by Forbes Insights. All executives are VP or higher, and 48% of those surveyed are members of the C-suite. Management responsibilities represent a range of functions””including e-commerce, marketing, operations, audience development/subscription and general management. All firms represented in the survey are based in the United States and Europe. They have annual revenues of $25 million or more; 32% have revenues of more than $1 billion.
