Consumers Finding It Increasingly Difficult, Important to Trust Organizations Making Brand Loyalty Elusive
Growing concerns regarding privacy and data security have reached a tipping point, driven by an astonishing increase in consumers’ expectations for trust and transparency in the brands they purchase, according to Brand Keys 24th annual Customer Loyalty Engagement Index® (CLEI), conducted by the New York-based brand engagement and customer loyalty research consultancy (brandkeys.com).
“Trust – an engagement factor in every product/service category – has become the indispensable connective tissue between brands and customer loyalty,” said Robert Passikoff, president of Brand Keys. “Consumer expectations for that single value have increased across every category and brand we track, on average by 250+% since 2018. Consumer expectations increase each year - normally in the 2% to 25% range. This is an unprecedented spike.”
This year the Brand Keys CLEI examined 90 categories and 822 individual brands. All showed significant increases in consumer expectations for the value of “trust,” some brands significantly more than others.
“It isn’t just Facebook’s, Google’s, Twitter’s and other social networks’ failures to address privacy, security, and transparency that are responsible, although making significant contributions to the paradigm shift. Charges of hacking – foreign and domestic – and misuse of data have raised consumers’ emotional hackles,” noted Passikoff.
In recent years a more emotionally based process has created a more value-infused, complicated path-to-purchase as it regards ‘trust.’ If marketers think they know consumers’ trust levels for their brands, this year they need to take another look preferably using methods more precise than traditional brand tracking.
“Building brand trust isn’t a matter of technique or more social networking, but the development of actual, believable brand character and values," noted Passikoff.
Travel Sector Loyalty Generators
Top-5 brands customers rated highly at creating emotional engagement and loyalty in the Travel categories are:
1. Ritz Carlton
2. Four Seasons
3. JW Marriott
4. Embassy Suites
3. Fairfield Inn
4. Hampton Inn
5. La Quinta
1. Wyndham Microtel
2. Days Inn
3. Americas Best Value Inn
4. Howard Johnson Express
5. Super 8
In 2019, and for the foreseeable future, there are three concrete fiscal realities of loyalty and engagement that marketers should keep in mind:
- It costs 9 to 11 times more to recruit a new customer than to keep an existing one.
- An increase in loyalty of only 7% can lift lifetime profits per customer by as much as 85%.
- Depending upon the sector, an increase in loyalty of just 3% is equivalent to a 10% across-the-board cost reduction program.
A complete list of the 2019 CLEIs loyalty and engagement winners can be found at:
For the 2019 CLEI survey, 51,673 consumers, 16 to 65 years of age from the nine US Census Regions, self-selected categories in which they are consumers and brands for which they are customers. Forty-five (45%) percent were interviewed by phone, forty-five (45%) percent via face-to-face interviews (to include cell phone-only households), and 10% were interviewed online.
Brand Keys uses an independently-validated research methodology that fuses emotional and rational aspects of the categories, identifies four path-to-purchase behavioral drivers for the category-specific Ideal, and identifies the values that form the components of each driver, along with their percent-contribution to engagement, loyalty, and profitability.
These assessments are leading-indicators of consumer behavior, identifying such activities 12 to 18 months before they appear in traditional brand tracking or in focus groups. Brand Keys research technique, a combination of psychological inquiry and statistical analyses, has a test/re-test reliability of 0.93, and produces results generalizable at the 95% confidence level. It has been successfully used in B2B and B2C categories in 35 countries.