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KPMG: Experience more important than rewards to UK consumers

Nov 29
 
Tags: KPMG LLP
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KPMG: Experience more important than rewards to UK...

Overall customer experience, as well as product quality, value for money and pricing, are more important to UK consumers than loyalty schemes based on points and rewards.

That's according to KPMG, which surveyed more than 18,000 consumers in 20 countries and found that only 37% of respondents viewed loyalty programmes as an effective way to earn their favour.

Recent research by the firm has also highlighted the types of brands that are achieving the highest standards in customer experience.

Reinventing loyalty

The vast majority of UK consumers (95%) said companies need to find new ways to reward their loyalty.

Paul Martin, UK head of retail at KPMG, pointed out that just as high streets are having to come to terms with ongoing structural change in the industry, the concept of loyalty is also being reimagined.

He noted that "loyalty is by no means dead, but it's clearly being reinvented for the digital age", meaning consumer-facing companies need to "look beyond the points-based plastic loyalty cards of yesteryear".

"Consumers are increasingly engaging with platform businesses, often paying a subscription to access a plethora of goods and services, with their custom rewarded with tailored and personalised offers and rewards," Mr Martin added.

KPMG's research looked into a number of specific dimensions of consumer loyalty, including the three most important factors in customer dedication to retailers: value for money, customer service and pricing.

As far as the business benefits of loyalty are concerned, 86% of British consumers said they would be likely to recommend a brand to which they felt loyal to friends and family. More than three-quarters (78%) would be more likely to buy from a company because they wanted to, not just because they needed to.

Which brands are excelling at customer experience?

A separate report provided an insight into which brands and types of businesses are the most likely to be earning the loyalty of their customers by delivering the best experiences.

KPMG Nunwood's report 'Customer First. Customer Obsessed' revealed that travel and hotel brands topped the experience rankings in nine out of 20 global markets, based on analysis of more than 84,000 consumers.

Singapore Airlines was the top performer in its home country, as well as Australia, Hong Kong and China, while hotel brands Mercure and Hilton got the best ratings in France and Germany respectively.

In the UK, Virgin Atlantic ranked eighth out of all British brands for customer experience. However, the UK deviated somewhat from global trends in that the travel and hotels sector was seventh overall.

Analysis of the key drivers of customer experience suggested that personalisation was the biggest driver of loyalty and advocacy, while showing empathy with consumers is the process most brands struggle with.

Will Hawkley, KPMG's global head of leisure and hospitality, said many travel businesses are looking for the balance between innovative technologies and meeting the "clear need for human interaction in this sector".

"Customers want to benefit from the value and convenience technology provides, but in many cases they also want to feel looked after and that requires a personal touch," he added.

"Delivering this requires deep insight into what customers want, as well as a high level of execution capability, and the leading brands are clearly investing in both."

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