When McKinsey recently published their customer loyalty study, it was a wake-up call, revealing that, over the course of this topsy-turvy year, 75% of US consumers have upended their own shopping practices.
Yes, 3 out of 4 American customers turned away from the brands they had been patronizing, choosing to look for new brands – and buy from them – instead.
They had to.
Especially during the earliest months of the pandemic, the brands they loved were often incapable of delivering on their own brand promises. Product shortages were rampant and often, unexpected. Calls to customer service ended up languishing on hold to the point of exasperation. And American consumers looked for something not just quicker or easier, but something that made them feel taken care of, reassured, safer at a time when just about everything in their world felt uncertain. They shopped around. And they liked what they found. They liked it so much, in fact, that 60% of them intend to stick with those new brands going forward.
You didn’t cause this year’s upheaval. But if you weren’t able to pivot, adapt, accommodate quickly enough, your brand might have bruised the trust of even your previously most loyal customers. And that, as Lisa Loftis points out in her recent article for CMS Wire, may have long lasting impacts on customer loyalty – and all of the key performance indicators that lean so heavily on it.
A big question now is: how can you rebuild that trust. A bigger one, I think, is: how can you be better able to keep up with your customers’ needs in the future?
You can read her article, below. It closes with Loftis pointing to five questions every brand leader needs to be asking in order to build and protect customer trust and loyalty. As you read them, I would add one more, very specific question: is your customer care platform designed, staffed, managed, and powered by the technology it will take to build and sustain your customers’ trust?
At Skybridge Americas, we have been helping our clients build customer trust, loyalty, and profitability by delivering superior experiences at every point of contact. If you would like to know how we can help you, please reach out. We would love to talk!
Loyalty Without Trust: A Long Walk Off a Short Pier
“Trust is the basis of any customer-provider relationship. Without trust, you have no relationship.” — Robert Lucas
Trust is defined as “a firm belief in the character, strength or truth of someone or something.” Loyalty, “a strong feeling of support or allegiance.” It seems like economist Robert Lucas was stating the obvious when he posited that trust and loyalty (customer relationships) go together. Right? Well, maybe — but truths, however obvious, are not always so easy to achieve.
Entrepreneur Dhar Mann once said “trust takes years to build, seconds to break and forever to repair” and this has never been more evident than today. The Futurum Research study, Experience 2030, found that trust is a fleeting commodity in the eyes of consumers, with 76% concerned with the amount of data brands gather, 73% concerned with how brands are using their data and 61% feeling they have no control over their data. Making it worse, despite giving lip service to the importance of data privacy, only 48% of companies strongly agree on the value of a proactive approach to transparency involving data privacy and 77% agree that they sometimes implement a program they know not to be secure to gain a time-to-market or competitive advantage. Futurum found that this problem is so pervasive that they called it a crisis of trust in North America and Europe. This is highlighted by the combined total of 49 major GDPR (Global Data Privacy Regulation) fines in 2019 and 2020 to date, with those fines totaling a whopping $357,079,465.
The situation for loyalty isn’t much brighter.
A recent McKinsey study calls loyalty “up for grabs” with 75% of US consumers indicating that they have tried new stores, brands or websites since the start of the COVID-19 crisis and a full 60% expecting to integrate the new brands and stores into their lifestyles post-pandemic. The Futurum study found a substantial gap between consumer and company perceptions about loyalty, with 42% of consumers saying three or fewer brands provide a high level of satisfaction (which clearly equates to loyalty), while 90% of brands believing that they do provide the highest level of satisfaction.
Course Corrections: Lengthening the Pier
Reversing these downward trust and loyalty perceptions must be done immediately because the pandemic is accelerating the tie between loyalty and trust, driven in large measure by the rapid adoption of all things digital. The McKinsey study called it the quickening, citing real feelings of whiplash by companies due to the pace of change as digital and ecommerce growth has accelerated 10 years in 90 days.
Senior Vice President, Sales and Marketing
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