Emerging studies show that initially attractive loyalty programs won't keep customers coming back if retailers don't offer them significant benefits.
A study by Forrester Research found that retailers are generating the most customer satisfaction and loyalty, while service producers for TV and internet are the easiest for consumers to abandon when competitors offer lower prices, as reported by The New York Times.
The study revealed 80 percent of customers are unlikely to take their business away from their favorite retail store. Investment firms have the second highest loyalty at 73 percent and health insurance plans and providers came in next at 72 percent. Financial services, such as banks and credit card providers, earned the loyalty of 70 percent of their customers, while hotels, PC manufacturers and airlines all came in last on the list with scores in the mid- to low-60's.
Some companies are not inspiring customer loyalty because they are mistaking rewards programs for true loyalty marketing, according to CRM Trends. Retailers spend approximately $10 million each year on programs that do not drive loyalty because they do not offer consumers substantial benefits for returning, reports Retail Customer Experience. Stores can improve efforts by backing up offers and working to meet the needs of customers that are already shopping there rather than constantly acquiring new ones, the source explains.