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Tags: brand | loyalty | financial | needs

6 Reasons It's Time to Prioritize Your Financial Needs Over Brand Loyalty

6 Reasons It's Time to Prioritize Your Financial Needs Over Brand Loyalty
(Egor Kotenko | Dreamstime.com)

Maxime Rieman By Tuesday, 28 April 2020 06:33 PM EDT Current | Bio | Archive

With the coronavirus impacting industries and companies at every level, developing brand loyalty is more crucial than ever.

Acquiring and retaining consumers is the cornerstone of business success — once customers become loyal and satisfied with a brand, they tend to spend more money and refer their friends and family, which drives free referrals and increases revenue.

In fact, according to a recent survey, 36.5% of respondents said that they would spend more on products if they were loyal to the brand itself, even if there was a cheaper option available.

Additionally, 59.3% of customers said they would refer their friends and family to a brand they love, which, in turn, creates more loyal customers.

How Companies Try to Keep You Loyal

How do brands capture your attention? By building a true, emotional connection with their customers. To do so, they use several strategies that include:

  • Focusing on the customer’s experience: According to the Microsoft 2018 State of Global Customer Service Report, 66% of respondents said that customer service was very important in their choice of brand loyalty. Developing a great customer experience includes everything from the product design to the quality of customer service.
  • Offering loyalty programs that make shoppers feel appreciated: Businesses often create loyalty programs as extensions of their brands. These programs offer everything from cash back rewards to free purchases. Some companies also host events or offer discounts that can make a customer feel special — from invite-only events to early access to sales, these benefits make customers feel like VIPs.
  • Maintaining the quality of the product: The Yotpo survey also found that 77.8% of consumers polled said that the product was the main reason they remained loyal to a brand. This, in part, explains the success of digital brands that often focus exclusively on one popular product before they develop other offerings.

How to Know When It’s Time to Break Up With Your Brand

Even with the incentives and perks that come with shopping with your favorite brands, sometimes your loyalty needs to shift. Whether a brand has betrayed your trust through over-mining your data or you suddenly experienced horrible customer service that wasted hours of your time, there are a few telltale signs it’s time to break up with your brand.

1] You’re missing potential savings opportunities. 

Being loyal to one brand limits your cost-saving opportunities, and it’s a habit you develop over time. According to a recent study, 70% of millennial drivers would spend an hour comparing auto insurance quotes to save $100, compared to just 46% of boomers. It’s all too easy to become complacent in your purchases, opting for the devil you know versus the devil you don’t. But whether you’re looking for insurance or a new microwave, shopping around is the best way to make sure you’re getting the highest quality at the lowest price point.

2] You regularly receive poor customer service. 

While no company is perfect and all make mistakes from time to time, blind brand loyalty can hurt you. Take air travel, for example. AARP recently found that 78% of boomers are a part of an airline loyalty program. However, a separate study revealed that only 24% of boomers have issued a complaint against an airline, even though 52% believe overall customer service is declining. While this doesn’t conclusively reveal a correlation between airline loyalty programs and the likelihood of filing a complaint, it is reasonable to assume that the perks of loyalty programs are keeping boomers attached to their airlines of choice.

Similarly, feeling like a customer service rep is not well versed in the product or service can be a major turnoff for consumers. In fact, Microsoft found that for 40% of respondents, the most frustrating aspect of poor customer service was a representative who couldn’t help solve a problem.

If one of the brands you favor can’t address your issue or lacks the knowledge to do so, it’s time to look for another option. The energy and time spent dealing with ignorant customer service reps would be better spent looking for an alternative solution.

3] A company uses your data without your knowledge. 

Businesses can collect data from consumers who use or visit their sites for their internal marketing purposes or to develop target market campaigns. Many of the common web tools for collecting this data are acceptable business practices as long as consumers comply with the regulations in their privacy policies.

While many consumers are unaware of the amount of data being collected on their behalf, many are uncomfortable with the idea that it can happen at all. According to a recent Pew Research Center survey, 74% of respondents had no idea that Facebook categorizes their interests, while 51% of respondents said they are not comfortable with Facebook compiling this information. If you feel uneasy about the way a certain brand is mining your data, it may be time to move on.

4] You receive an alarming amount of spam. 

Another marketing tactic businesses often use is engaging with customers through email. While you may find some of this email communication useful, some companies might take advantage and spam your inbox. According to a recent survey from Marketing Sherpa, 19% of respondents unsubscribe from email lists because they receive too many emails from a specific company, while another 19% unsubscribe because they feel the company is always trying to sell something.

If you’re receiving email communication from a specific company that feels a lot like spam, unsubscribe and find a new brand.

5] The brand shows a lack of innovation and adaptation. 

With ever-changing advancements in technology, customers crave innovation and adaptation. Brands that don’t change with the times are doomed to fail, as was the case for Blockbuster Entertainment Inc., which met their demise in part by not embracing trends in digital or streaming services. Thus, customers shifted to more innovative brands like Netflix.

6] You aren’t getting personalized attention. 

Brand value can be more than just monetary. It can come in the form of an emotional or personalized experience. According to a Gladly’s 2018 Customer Expectations Survey, 61% of respondents said they feel like they are treated as case numbers instead of customers by the companies they buy from. If a brand isn’t providing adequate personalized service or experiences, it may be time to look elsewhere.

Maxime Rieman is Product Manager at ValuePenguin. Educating and assisting shoppers about financial products has been Rieman's focus, which led her to joining ValuePenguin, a consumer research and advice company based in New York. Previously, she was product marketing director at CoverWallet and launched the personal insurance team at NerdWallet.

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With the coronavirus impacting industries and companies at every level, developing brand loyalty is more crucial than ever.
brand, loyalty, financial, needs
Tuesday, 28 April 2020 06:33 PM
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