December 15, 2017

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June 21, 2017

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Do promotions impact customer loyalty?

February 14, 2018



In today’s dynamic and competitive retail environment, every brand depends on the acceptance of customers. With numerous choices available, consumers can be influenced by many factors such as price, promotions and quality. However, our whitepaper: From promotion to devotion: winning retail strategies for the digital age highlights the true impact sales promotions have on customer loyalty.


The research shows that if brands get promotions right, the positive effect on loyalty can be significant. Overall, rewards have a big impact on customer devotion, with 68% saying that receiving a reward would increase their loyalty towards a brand.


Our research also reveals some interesting considerations, particularly for brands targeting Millennials. It was found that younger generations are more easily influenced by rewards when it comes to loyalty, with consumers aged 16 to 24 admitting to being the most influenced.


I’m sure you have heard the age-old market statistic that it costs five times as much budget to win a new custom­er, than to retain an existing one. With that in mind, it is certainly key for retailers to champion customer loyalty; however as it can often be difficult to engage with consumers in the shopping environment, using promotional offers is a good way to help win new customers. But it’s up to the brand to retain them. With more than half of the respondents (56%) stating they would switch products because of a promotional offer, this certainly makes for a good starting point.


Drilling deeper into the demographic findings, interestingly earnings don’t correlate with switching products because of an offer. Those who earn £45,000 to £55,000 are the most likely to switch, with 66% in agreement with the statement. Consumers who don’t work are least likely to switch.


Although it seems consumers are willing to stay loyal to a brand who offer rewards and promotions, knowing your consumer is still vital. Promotions are nothing without audience insight, so tailoring promotions to the correct target demographic has never been more important, especially with the rise of digital in retail.


Check out the full report here for more insight into customer loyalty and the impact promotions can have for brands.


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