Marketing

Bringing brand loyalty back: Adapting to a new age of customer expectations

With competition for consumers’ attention at an all-time high, brands that embrace the latest technology to forge deeper, personalized experiences with customers will help set themselves apart and stay ahead of the curve.

Photo: Adobe Stock

September 17, 2024 by Todd Pollak — Chief Revenue Officer, Marqeta

In a competitive environment, customer retention is everything. Existing customers spend 67% more on average than new customers, highlighting the urgency for retail brands to ensure repeat business.

Despite this awareness, retailers are fighting an uphill battle since customer loyalty is harder than ever to achieve and maintain. There's been a 14% decline in customer loyalty in the U.S. from 2022 to 2023 and 36% of US consumers said they were not loyal to any brand. Younger generations are expected to be even less loyal, with only 7% of consumers aged 18-34 reporting feeling loyal to a brand.

Why the customer experience matters more than ever

The crowded retail market requires brands to differentiate themselves from competitors and offer unique experiences that make consumers feel valued and understood. With customer expectations rising, brands must prioritize the customer experience to foster lasting loyalty. According to a Marqeta survey, 60% of U.S. consumers report that having positive customer experience is key to influencing their brand loyalties. The financial impact of the customer experience can also be substantial: companies earning $1 billion annually can potentially earn an additional $700 million within three years of investing in the customer journey, showing the power of a seamless and differentiated customer experience.

Retailers must be thinking regularly about the entire customer journey, ensuring every interaction is a positive and well-thought-out experience to help retain customers. This should include consistent shopping experiences across all channels, including mobile, online and in-store, and personalized interactions based on individual customer behaviors.

Loyalty programs are also key as retailers look to reward their repeat customers and keep them coming back. There are a few retailers already doing this well, such as Starbucks and Target, allowing customers to earn rewards and get personalized deals, which provide consistent value and encourage repeat engagement.

Reinforce your brand at every customer touch point

What would make customers more likely to make another purchase? A strong brand identity helps to foster customer loyalty by providing consistency across all customer touch points. Retailers that maintain consistent branding and messaging, and offer personalized interactions at every stage build trust and deeper connections with their customers, which can help lead to repeat business. From the shopping experience to post-purchase support, and everything in between, reinforcing high-quality service throughout the journey keeps customers coming back. Each touch point matters significantly.

Given that 70% of all e-commerce visitors abandon their shopping carts, and 67% of customers start shopping on one device and continue on another, seamless, integrated checkout experiences are essential for strengthening customer satisfaction and conversion rates. In an effort to create a simplified checkout experience, retailers must reduce the amount of steps and friction in the process. Integrating the payment experience into their website or application helps to create a consistent brand experience and removes the need to send individuals to a third party website. Customers should also be allowed to pay with a variety of methods, whether credit or debit cards or digital wallets, such as Apple and Google Pay, helping to cater to their unique needs and making the process as easy as possible.

Differentiate the customer experience with embedded payment solutions

As the need for integrated customer experiences grows, more retailers can benefit from leveraging embedded finance, where non-financial services companies offer financial services to their customers. Marqeta's survey also found 42% of U.S. consumers said they would be open to receiving financial services from a non-traditional provider, increasing to 63% for younger consumers ages 18-34 years old. With embedded finance, retail brands can offer debit or credit cards, Buy Now, Pay Later services or other banking solutions such as instant card issuance directly within their customer journeys.

Payment cards are more than just purchasing methods — they're a marketing tool to attract customers and influence their spending habits — and should be a part of a comprehensive marketing strategy to boost customer engagement and loyalty. Brands can build card programs into their offerings based on specific customer profiles and spending behaviors, providing tailored incentives that are catered to individuals. Research from Marqeta found 41% of consumers currently have a credit card affiliated with a brand, highlighting the potential for embedded payment cards, creating new methods of engaging new audiences and encouraging customer loyalty.

With embedded payment cards, retailers can gain deeper insights into user spending habits, preferences, and behaviors. Personalization driven by this data can significantly impact business outcomes, potentially reducing acquisition costs by as much as 50% and lifting revenues by 5 to 15%. Integrating payments into their offerings provides retailers with valuable data that can be analyzed to create personalized offers, discounts, and product recommendations, ultimately enhancing the customer experience and driving growth.

We're facing a monumental time in retail, where consumers have an entirely new relationship with brands and simultaneously expect more from them while also being ready to jump ship to a competitor if a brand doesn't deliver. With competition for consumers' attention at an all-time high, brands that embrace the latest technology to forge deeper, personalized experiences with their customers will help set themselves apart and stay ahead of the curve.

About Todd Pollak

---