What makes customers loyal to a brand? Our research provides insights on the most important factors.
- What did the Retail Customer Loyalty Study examine?
- What role do price and loyalty programs play in loyalty?
- Which retailer has the most loyal customers?
- What are the main customer personality types?
- Which factors drive loyalty for different customer personality types?
- How do you define customer characteristics?
- Which loyalty factors matter most to different types of customers?
- Which retailers are preferred by different customer personality types?
- Which loyalty factors are most important at the top four retailers?
- How do demographics relate to customer personality types?
- The bottom line on brand loyalty and customer personalities.
What customer characteristics drive retail customer loyalty? We found answers to that question with our Retail Customer Loyalty Study. Along the way, we found hope for the struggling retail environment — and ways to assist individual retail organizations in staying competitive.
With the insights from our study, retailers can improve customer loyalty and engagement by understanding and controlling the levers that drive loyalty among different types of customers within their consumer base. They can gain crucial insight for differentiating themselves in relation to both direct competitors and “global competitors” like Amazon and Walmart. And they can use the information as a guide for how best to target and prioritize resources and budget.
What did the Retail Customer Loyalty Study examine?
We questioned more than 1,000 consumers about their loyalty to retailers to uncover the factors that drive them to shop exclusively with any given brand. We examined:
- When all things are equal, which factors drive customers to shop exclusively with a particular retailer?
- Which factors are most important to “super loyal” customers versus consumers who always shop around?
- Which retailers make loyal customers out of consumers whose style it is to shop around?
- Which factors influence a non-loyal customer to shop exclusively at a particular retailer — in other words, what would make them more loyal?
- Are there tendencies to be more or less loyal based on demographics?
The collected customer loyalty statistics provide quantitative insights and year-over-year comparisons, identifying the most significant factors that drive loyalty to nearly 500 individual U.S. retailers representing every retail category.
See the complete list of retailers participating in the Retail Customer Loyalty Study.
What role do price and loyalty programs play in customer retention?
In this “age of the customer,” consumers have more choice about when, where, how and WHO to shop than ever before. This abundance of choice has left many retailers struggling to differentiate themselves from their competitors. Many retailers are finding that their product and service offerings are seen by all types of customers as commodities, forcing those retailers into a spiral to the bottom to compete merely on price.
The study, however, clearly demonstrates that while price is a deciding factor, receiving good value and ease in making purchases actually has a greater impact on loyalty for the majority of customer personality types.
In addition, while retail loyalty programs influence shopper loyalty, there are other compelling factors driving customer retention. The bottom line is that neither price nor loyalty programs alone can fix sales and traffic issues related to a poor product offering, customer experience or countless other business issues.
Which retailer has the most loyal customers?
More customers than ever are reporting that they prefer to consistently shop with the same retailers rather than shop around. According to our Customer Loyalty Study, 37% of customers report that they prefer to consistently shop with the same retailer, up from 35% the previous year.
An increasing number of customers name niche retailers — both pure play online and bricks-and-mortar — as the retailer they prefer to shop exclusively. But we also saw customers pinpointing some of the big names: Walmart, Amazon and Target topped the list of retailers named most frequently as preferred shopping spots.
What are the main customer personality types?
Our customer loyalty statistics show that consumers fall into three different types of customers in retail: Loyalists, Roamers and Neutrals. Consumers were somewhat evenly divided among these three shopper personalities.
Retailers tend to attract all three shopping personalities, but to varying degrees. For example, Amazon attracts more Roamers than Walmart, but Walmart attracts more Loyalists. Target attracts the most Loyalists of these three retailers at 41%.
Which factors drive loyalty in different customer personality types?
According to the loyalty statistics from our study, the factors that drive customer loyalty among different types of customers are broad and encompass the entire retail enterprise. Factors listed by consumers ranged from the tangible, such as receiving incentives to shop, to the intangible, like trust or viewing shopping at a particular retailer as a status symbol.
When asked which factors would encourage them to select one retailer over another if access, products and price were equal, the respondents’ top answers were not surprising and remained closely aligned with the previous year’s preferences:
Further Reading: Customer segmentation is an essential marketing tool and a time-tested marketing strategy for engaging different types of customers. Our guide will help you identify and segment personalities within your specific customer base, forming the foundation for your customer targeting strategy.
How do you define customer characteristics?
Factors related to customer characteristics travel on a spectrum from practical factors — such as ease of purchasing or returning, incentives and customer service — to passion or emotional factors, such as trust, fair treatment, and social responsibility. These dynamics help define what’s important to different customer personality types.
These critical differences along the passion-practicality spectrum should be factored into any retail loyalty program design to ensure maximum impact on the targeted shopper personalities.
Which loyalty factors matter most to different types of customers?
One of the most surprising findings of our Retail Customer Loyalty Study is the difference in which factors matter most to Loyalists who consistently shop a retailer versus less loyal shopper types.
With Loyalists, some distinct elements came into play, most defined by the multi-faceted Passion Dynamic. The other two shopping personalities were more likely to prefer more pragmatic, or practical, factors — such as ease of shopping.
Loyalists listed a preference for a streamlined shopping experience, citing such features as the ability to look up past purchases and find helpful information online or via an app. But the standout loyalty statistic for this group is the high interest in multiple intangible factors, such as fair treatment, trust, caring staff and status.
The factors most important to Roamers comprise the Practicality Dynamic. Interestingly, this customer personality type was more likely to cite receiving incentives to shop as a top motivator. This indicates they were more motivated by promotions and loyalty programs than Loyalists.
Roamers tended to be more dispassionate, more practical and more driven by the tangible aspects of the shopping experience itself. This type of shopper ranks ease of making purchases and returns and customer service as factors that cause them to select one retailer over another. Having the lowest price and incentives to shop were also top-ranked factors.
For those shoppers who demonstrate some loyalty to specific retailers, the customer loyalty study showed a greater divergence of motivating factors. This makes it more challenging for retailers to meet the needs of this fickle shopping personality type.
Neutrals ranked receiving fair treatment as important and also pinpointed informative website as an influential factor. At the same time, they did not rank customer service as high, perhaps indicating that they are willing to self-serve. But when this type of shopper does interact with staff, they desire responsiveness.
It’s easy to think of the Neutral shoppers as deal seekers who decide based on price. But this group tended to place less importance on incentives than the others. And their interest in convenience factors was relatively high. This type of customer is less likely to put a lot of thought into shopping, but does want an easy experience and wants to believe they’re receiving a decent value.
This viewpoint is supported by the age ranges most likely to fall into the Neutral personality: 35 to 44, and 55-plus.
Older millennials and younger Gen Xers are often juggling families, careers and other obligations and likely will fall back on their favorites if those retailers have what they need. Baby boomers are embarking upon a sea change as they near retirement, which opens them up to new possibilities while they are still relying on their standby retailers.
Which retailers are preferred by different customer personality types?
The Customer Loyalty Study uncovered brand loyalty statistics based on consumer input related to nearly 500 retailers. While the top 10 retailer lists of both Loyalists and Roamers contained many of the same brands and remained surprisingly consistent year over year, the overall top selections for these customer personality types showed some interesting differences.
- Loyalists lean toward more traditional retailers and big-box retailers, citing JC Penney for the second year and adding Sam’s Club in 2019.
- Roamers are more discount- and value-oriented, and were more likely to list Dollar General again this year.
The following retailers were most often listed when consumers were asked to name where they tended to shop exclusively for particular needs. Interestingly, Walmart took over the number-one spot from Amazon this year, while Best Buy dropped out of the top 10.
Which loyalty factors are most important at the top four retailers?
There are interesting variances in loyalty factors cited by all types of customers based on the retailer they named as one they tended to exclusively shop. For instance, titans Walmart and Amazon tended to align closely to the overall retail norm, with Walmart customers valuing fair treatment much more than Amazon customers or customers overall. Macy’s customers, on the other hand, value convenient shopping less than — and receiving incentives to shop more than — Walmart or Amazon customers, or even customers in general.
Below is a chart showing Shopping Personalities Profiles for four retailers: Amazon, Target, Macy’s and Walmart. Following that are detailed charts for each individual retailer. (Click any chart to view it full size.)
How do demographics relate to customer personality types?
The shopping personalities became more complex but revealing when filtered by demographics.
Gender. It’s no surprise that gender plays an important role in shopping styles, with men tending to be Loyalists and women tending to fall into the Roamer category, preferring to shop around before making purchases. Surprisingly, men have a higher tendency to shop at retailers they view as status symbols.
Presence of children. The presence of children in the household delivered some of the most interesting insights. Families with kids at home tend to shop around before making purchases, while households without kids tended to be Loyalists. It appears that even though parents may be time-strapped, they are more status-driven and willing to shop around for incentives. This results in one of the lowest Passion Factor ratings for any group. Shoppers without children in the home show a broader and higher Passion Factor.
Life stage. Another surprise from the survey relates to how a shopper’s loyalty evolves over time. Customers actually move back and forth on the shopping personalities spectrum several times during their lifetime.
Millennials are more driven by VIP treatment and status, while Gen Xers are more driven by a convenient shopping experience and customer service. This also shows a slight change from last year, when both Gen Xers and younger millennials were more driven by incentives and customer service.
Region. While Midwesterners often have a reputation for solidity and loyalty, this remains one of the regions where consumers are more likely to shop around. Northeasterners were also more likely to fall into the Roamer camp for the second year in a row. Consumers in the South and West, however, still tend to have more loyal shopper personalities.
The Bottom Line on Brand Loyalty and Customer Personalities
With brand loyalty statistics showing that more than one-third of consumers prefer to shop at the same retailers, the death knell for loyalty has been over-marketed. But it’s important to understand your customers’ shopping personalities and identify which ones are Loyalists, Neutrals or Roamers. This will help you understand the factors driving each group’s shopping preferences and allow you to leverage those factors to help nurture, maintain and grow your customer base.
- Loyalists. Your shopping environment needs to support the relevant shopping factors for your brand positioning to attract and retain this type of customer. They look for factors on the passion end of the spectrum, such as trust, caring staff and fair treatment.
- Neutrals. This customer personality type needs to easily understand your practical factors and experience a streamlined experience.
- Roamers. Practical factors tend to drive Roamers, who play their own part in your retail ecosystem. Roamers value such factors as ease of making purchases, easy returns, lowest price and incentives to shop.
It’s also critical to share customer loyalty statistics and customer personalities data across your enterprise. The factors that build customer loyalty and drive engagement among different types of customers are broad and require enterprise-wide support from all aspects of the business — from customer-facing personnel and technologies to the back-office people and processes that support them.
And, while every brand can’t rank top in every factor, you need to ensure that your brand attributes and positioning are being supported to best drive business for different types of customers. With today’s digital environment, you also must employ a multi-faceted approach to individual customers and ensure that your messaging is targeted and relevant.
Whether you need to identify the different customer personalities in your client base or develop initiatives to leverage that information to increase customer retention and revenue, our team of retail marketing experts can help.