Survey: Brand loyalty decreases as consumers look for ways to save

With prices remaining high, brand loyalty is continuing to decrease among American consumers.

The U.S. experienced a 14% decline in customer loyalty, or those who are loyal to one brand or more, dropping from 79% in 2022 to 68% in 2023, according to the 2023 Customer Loyalty Index from Emarsys, an SAP company, Among the five loyalty types defined by index, for the third year in a row, nearly half (49%) of consumers fall under incentivized loyalty. 

However, incentivized loyalty has plummeted 36% from 76% to 49%. Emarsys says that incentivized loyalty depends on the suspension of normal prices. While nearly half (49%) of Americans expect regular discounts, loyalty points and incentives, nearly six-in-10 (59%) consumers would also typically switch products if a cheaper option were available, making cost the top reason a shopper would leave a brand.

According to the survey data, discounts and deals work best when tailored to the individual, with 50% of respondents believing that having a loyalty card or account significantly influences their spending with a brand. More than four-in-10 (43%) of respondents anticipate better prices as loyal customers, while 46% expect their loyalty to be rewarded by exclusive offers. Nearly 20% of respondents said that they have signed up for or started using more loyalty schemes to ensure they receive the best value from brands.

“Rather than being discouraged by this drop in customer loyalty, marketers should take full advantage of this opportunity to enhance their loyalty strategies and deliver exceptional customer experiences,” said Kelsey Jones, global head of product marketing at SAP Emarsys. “Consumers now expect their loyalty to be rewarded by personalized and value-adding experiences.”

According to the survey, retailers with customer service (52%), offering discounts, incentives, and rewards (49%), and providing diverse options for benefiting from such rewards (39%) are more likely to retain loyal customers. 

Consumers favor personalized, positive shopping experiences, with 52% switching brands due to unfavorable encounters, an increase from 48% in 2022. According to another recent survey, 73% of respondents are likely to abandon a brand after just one poor customer service experience.

“As consumers’ loyalty types shift, it is imperative marketers adapt by understanding changing consumer behaviors and leverage all available tools and data to attain and retain true customer loyalty,” added Jones. “This will require personalized offers, exceptional customer experiences, and a deep understanding of consumer preferences.”

Emarsys’ survey was conducted between Aug. 17-23, 2023, on 10,057 general respondents across the U.S., U.K., Australia and Germany.