percent of Egyptian respondents said they were more likely to shop at retailers that offer loyalty programs (marketing programs that reward members with purchase incentives), while only 36 percent said that loyalty programs were available where they shopped, according to a new study by Nielsen, a leading global provider of information and insights into what consumers watch and buy.[blockquote style=”quote” align=”” author=”Tamer El Araby, Managing Director for Egypt and Levant, Nielsen”]While the concept of loyalty is high among some sectors, retailers should be investing in loyalty programs that give them valuable insight into how to better meet customer needs,Savvy retailers should work hard to find new and innovative ways to achieve the benefits most important to their customers.[/blockquote]
The Nielsen Global Survey of Loyalty Sentiment polled more than 29,000 Internet respondents in 58 countries to evaluate consumer views on loyalty levels across 16 categories including fast-moving consumer goods, technology products and retail establishments. Nielsen found that, on average, more respondents claimed to be not loyal than completely loyal to brands, service providers and retailers. Most respondents said they were mostly loyal, or unlikely to switch brands or providers without significant incentives.
Loyalty Program Benefits
According to Nielsen’s survey, less than three-quarters (69%) of Egyptian respondents said that discounted or free products was the most valuable loyalty program benefit. Enhanced customer service and free shipping incentives were important to 60 percent and 47 percent of Egyptian respondents.
“In markets where loyalty programs are still developing, customers tend to be focused on copy-cat promotional offerings that don’t offer unique advantages,” said El Araby. “However, as the consumers are becoming more complex, retailers and manufacturers need to work together to offer exclusive awards that cut through the clutter.”
Loyalty Sentiment Highest for Mobile Phones; Lowest for Food
[blockquote style=”quote” align=”right” author=”said El Araby. “]Retailers are now very focused on the promotions offering each month than better connecting with the unique needs of their shoppers.[/blockquote]Nielsen information shows that thirty seven percent of Egyptian respondents claimed complete loyalty to mobile phone brands, personal computer brands (31%) and mobile service providers (28%), which constitutes the highest percentages reported across the 16 categories measured.
Egyptian respondents reported the low levels of loyalty to food and beverage categories measured and online retailers. Thirty-six percent of Egyptian consumers surveyed said they were not loyal and likely to switch brands in snacks, thirty- three in cereal categories and thirty percent in carbonated soft drink. Forty-two percent of Egyptian respondents said they were not loyal to online retailers while twenty-five percent are not loyal to supermarkets or retailers.
Incentives to Switch
According to Nielsen’s survey, 35 percent of Egyptian respondents said getting a better price would encourage them to switch brands, service providers or retailers, followed by better quality (31%), a better service agreement (23%), better selection (6%) and better features (5%).
“While good prices may initially offer consumers enough motivation to change allegiance to a new product, it won’t keep consumers for long if the product doesn’t deliver on its promise,” said El Araby. “Getting the price/value equation right, having products in stock, and offering a satisfying shopping experience are vital ways to build long-lasting customer loyalty.”
According to Nielsen’s survey, respondents in the Middle East/Africa showed the highest percentage of complete loyalty for mobile phone brands (35%) and mobile service providers (28%), exceeding the global average. They were also most loyal to snack brands (21%) and cereal brands (21%), compared to other regions. Other Nielsen studies indicate that while availability and choice may be contributing factors for this level of loyalty, loyal brand patronage is highly correlated with consumers in this region. “In our region, we see evidence of highly price-sensitive consumers choosing brands that are not always the lowest-price alternative,” said El Araby. “Making a switch from a tried-and-true product to something new can represent a trade-off that consumers with little discretionary income are not willing to make. New brand adopters are usually found among consumers with higher socioeconomic status.”