Customer Retention Execs Believe the Pandemic Had a Net Positive Impact on Loyalty

March 27, 2023

The quality, reliability and consistency of products or services is believed to be the most important reason why a consumer will keep using or buying from a brand, according to a PwC survey of 410 B2C executives with sole responsibility or shared influence over business decisions on loyalty or retention.

This belief certainly has merits, considering that consumers themselves say that quality is the key lever in brand loyalty.

Beyond the quality of the product, offering a good value for the price is the next-leading reason why loyalty and retention executives believe consumers will stay loyal to a brand, and indeed this is one of the key builders of trust in businesses, according to separate research.

Overall, 61% of executive surveyed believe their customers are more loyal today than they were pre-pandemic, compared to just 26% who believe there’s been no change. However PwC contrasts this with research it fielded among more than 4,000 consumers last year, in which just 20% of respondents said they were more loyal to brands they bought from or used prior to the pandemic, with 75% instead saying their loyalty was unchanged.

Interestingly, in this latest study more executives reported believing that the pandemic had a positive (45%) than negative (33%) impact on brand loyalty.

When it comes to positive impacts on loyalty over the past couple of years, the broadest consensus among executives was for digital distribution, with 70% believing that this trend (such as direct-buy links from social media) has had a very positive effect on loyalty. Of note, while understanding customer behavior challenges was a challenge early on for marketers, these changes have had a large impact on strategies and fully 62% of customer retention executives believe that changing customer behavior has had a very positive impact on loyalty. An equal share (62%) feel that changes to their formal loyalty program have had a very positive effect.

On the other end of the spectrum, inflation is judged to have had the most negative impact on customer loyalty. Almost 8 in 10 consumers report having taken some kind of action in response to inflation, and the vast majority have changed their purchasing habits as a result, including by being more likely to buy brands on sale or promotion. As such, about half (49%) of the executives surveyed by PwC feel that inflation has had a negative or very negative effect on customer loyalty over the past 2 years. That outweighs the shares who believe the same about supply chain disruptions (44%) and talent shortages (39%).

Still, PwC suggests that these executives may be over-estimating the negative impact of inflation. When asked which of various factors they believe are the main reasons customers have left their company in the past year, 37% cited prices going up or discounts ending, while 26% indicated bad experiences with products or services.

However, consumers surveyed last year by PwC had these factors in the opposite order: 26% pointed to bad experiences as reasons why they stopped using or buying from a company/brand, compared to just 17% who said that they had abandoned a company or brand due to prices going up or discounts ending.

For more, check out PwC’s research here.

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