The research pieces highlighted in this roundup share a common theme: the challenges that companies face because of new technologies and altered expectations. It explains why brand loyalty is no longer just about coupons and discounts; why consumers want personalization yet do not trust brands to keep their data safe; the reason health insurers find it difficult to craft a seamless CX for members; how inflation is modifying consumer behavior; and why generation-specific messaging on social media is crucial to brand success. Details follow.
Merkle: CX Impacts Brand Loyalty Among Consumers
Loyalty programs are no longer just about discounts and transactions, and more than 75% of consumers say that consistent customer experiences and customer service will improve their likelihood of doing business with a brand, reveals the new 2022 Loyalty Barometer Report from Merkle, the Maryland-based CX management company. And with consumers seeking unique and personalized experiences that represent their values, brands must shift from offering simple loyalty programs to providing an all-encompassing loyalty experience across the entire CX, spanning marketing, sales, product, and customer service, the findings indicate.
The report highlights four key takeaways for marketing professionals in order to ramp up customer loyalty efforts in 2022 and beyond. These include leveraging loyalty to build trust across the entire CX; providing expanded financial utility while also delivering emotional benefits; eliminating unsophisticated data and personalization strategies; and creating a new dimension of engagement with promotion-based loyalty campaigns.
“Merkle’s Human Loyalty philosophy is based on the idea that brand loyalty starts by meeting consumers’ rational needs to establish the foundation of trust,” says James Riess, senior vice president of strategy and insights for Merkle’s promotion and loyalty solutions practice. “Once trust is established, it opens the door for brands to create an emotional connection, which leads to enduring brand loyalty.”
Twilio: Consumers Want Personalization, But Don’t Trust Brands With Their Data
At least 62% of consumers expect personalization when interacting with brands, says the third annual State of Personalization Report 2022 from Twilio Segment, the San Francisco-based provider of customer engagement and customer data platforms. Nonetheless, only 40% of consumers trust brands to use their data responsibly and keep it safe, the report states. In fact, lack of trust increasingly affects consumer-buying decisions: 60% of the buying public say trustworthiness and transparency are the most important traits of a brand, up from 55% in 2021. And although 63% of consumers say they are fine with personalization, that is true only if brands use their own data—not data purchased or rented from third parties.
Data and technology hurdles also present barriers to achieving personalization at scale, with the majority of businesses still struggling to offer omnichannel personalization, the report indicates. The most common barriers include lack of technology, unclear return on investment (ROI), lack of accurate data, and organizational impediments.
One important tool is the customer data platform (CDP), which helps businesses achieve compliance while managing first-party data for personalization, Twilio says. CDPs collect first-party data at every customer touchpoint to create a single, unified view of the customer, enabling companies to build deeper customer relationships.
Smart Communications: Health Insurers Find it Challenging to Provide Seamless Digital CX
The health insurance sector lags behind other industries in the use of technology to create a seamless digital experience for customers, negatively impacting CX and—ultimately—the insurer’s bottom line, states the new report, Disjointed Experiences Cost Insurers Members and Money, from Smart Communications, the UK-based provider of a customer conversations management platform. Health insurers find it challenging to create satisfactory digital experiences because of disjointed data or by tracking the wrong metrics.
And while health insurers recognize that a better member experience brings benefits like improved cross-sell opportunities and customer retention, the top customer lifecycle priorities for health insurers indicate that they are more focused on acquiring new customers than on improving the experiences of members.
The report also says that given their unsatisfactory digital experiences in finding pertinent information on the website, health insurance members choose offline channels—most notably, phone calls—to request customer service. Even so, 51% express dissatisfaction with their phone interactions.
“Consumers expect their interactions with healthcare insurers to reflect the same simple, intuitive experiences they have in retail and other industries,” says James Brown, CEO at Smart Communications. “Healthcare insurers are presented with an important opportunity to reimagine member experiences, especially during the claims process, by improving their conversations and by making them more personalized and highly relevant, which will build trust and loyalty.”
FullStory: Inflation is Causing Shifts in US Consumer Behavior
The behavior of US consumers is being affected by inflation, according to the second annual US digital experience survey of 1,500 American shoppers from FullStory, the Atlanta, Georgia-based provider of a platform for capturing CX data. With inflation rates running at their highest levels in 40 years, the percentage of consumers transacting online at least once a day has fallen to 33%, down 8 percentage points from 2021. And to combat inflation, 42% of consumers use coupons and discount codes, while 33% have switched to lower-priced or discount brands. The least popular approach for fighting inflation is buy-now-pay-later financing, with just 13% of consumers opting for the tactic.
Retail remains a bright spot, and consumers with discretionary income are least likely to cut back on retail purchases, the report notes. With back to-school and early holiday shopping ahead, 65% of US shoppers state they plan to purchase at retailers in the next three months. And while travel has been popular of late, consumers may curb travel spending in the coming months, with respondents citing hotels, airlines, and sit-down dining as the areas where they are cutting back. Overall, however, 91% of consumers rate their online retail experience three or higher on a scale of one to five–the highest of all verticals surveyed.
The report also shows the industries rated highest and lowest by consumers in their digital experience of various trades. The top three industries earning the highest consumer ratings are banking (30%), healthcare (22%), and retail (21%). In contrast, the bottom three industries with the lowest ratings are quick-service restaurants (13%), airlines (15%), and grocery (16%).
Emplifi: Gen Z Buyers Are the Least Satisfied with CX on Social Media
Gen Z consumers are the most dissatisfied segment among groups that make a purchase on social media, with 70% feeling that they do not receive excellent CX, according to the report7 Key Consumer Expectations Impacting Social Media Success Today from Emplifi, the provider of a cloud-based CX platform for social media marketing, social sales, and customer service headquartered in New York. The high dissatisfaction rate among Gen Z, the largest group of consumers worldwide, is in contrast to the 40% of the buying public that feel their CX to be excellent on social media, which is the preferred channel of shoppers today, the report indicates.
Emplifi’s survey of more than 1,000 US shoppers also shows that the platform of choice among consumers varies, depending on the generation to which they belong. Instagram (65%) and TikTok (51%) are the most popular among the younger age groups, while Facebook is trendier among Gen X (76%), compared to Gen Z (43%). The findings underscore the importance of factoring in age when shaping buyer personas and CX initiatives into social media strategies.
“Communication preferences change with time, which poses an immense challenge for brands whose product or service serves multiple generations,” says Shellie Vornhagen, chief experience officer (CXO) at Emplifi. “The key for brands to truly excel at CX is to expand care and marketing programs into the channels where their customers are active, and increasingly, that’s social media. Social continues to pull away as the consumers’ choice, and the companies that will succeed are those who follow their customers’ lead and embrace social as well.”
More than half of respondents (56%) feel that customer service quality has a larger impact on brand perception. When asked to pick one item that drives positive brand perceptions the most, consumers rated 24/7 customer service availability (29%) and quick response times (28%) as the top two items, showing the critical role of a solid, always-on customer care infrastructure on all channels.
Author Information
Alex is responsible for writing about trends and changes that are impacting the customer experience market. He had served as Principal Editor at Village Intelligence, a Los Angeles-based consultancy on technology impacting healthcare and healthcare-related industries. Alex was also Associate Director for Content Management at Omdia and Informa Tech, where he produced white papers, executive summaries, market insights, blogs, and other key content assets. His areas of coverage spanned the sectors grouped under the technology vertical, including semiconductors, smart technologies, enterprise & IT, media, displays, mobile, power, healthcare, China research, industrial and IoT, automotive, and transformative technologies.
At IHS Markit, he was Managing Editor of the company’s flagship IHS Quarterly, covering aerospace & defense, economics & country risk, chemicals, oil & gas, and other IHS verticals. He was Principal Editor of analyst output at iSuppli Corp. and Managing Editor of Market Watch, a fortnightly newsletter highlighting significant analyst report findings for pitching to the media. He started his career in writing as an Editor-Reporter for The Associated Press.
