Capgemini: Emotional engagement could add 5% to retailers’ annual revenues
As traditional loyalty programmes continue to fall out of favour due to their inability to drum the kind of engagement marketers crave, there is a disconnect between executives and consumers on what drives emotional engagement.
According to Capgemini, which surveyed 9,000 consumers and 500 executives, 80% of executives feel that their brand understands the needs and desires of their consumers. Only 15% of the consumers surveyed, however, agreed with this statement.
It is clear that consumers are falling out of love with loyalty programmes, with 28% of respondents abandoning schemes without redeeming point and 54% of loyalty memberships being currently inactive. One key reason behind this trend is the perceived “attempt to buy consumer loyalty through monetary rewards only”.
Consumers highlighted honesty and trust as having the greatest influence over whether they felt loyal to a brand or not. Although emotional engagement is not the whole picture, as ‘rational’ factors such as brand values still play an important part.
The Capgemini research shows just how important emotional engagement can be for brands. 82% of consumers rated as having high emotional engagement would always buy from the brands they are loyal to when making purchasing decisions. This compared to only 38% of consumers with low emotional engagement. 81% of engaged consumers also said they were very likely to promote the brand amongst their family friends.
Personalisation and reciprocation
“Consumers are immune to transaction based loyalty programs of the past, so a retailer’s engagement with consumers needs to shift from being transactional to more emotional and meaningful,” Kees Jacobs, Consumer Goods & Retail Lead, Insights & Data Global Practice at Capgemini said.
“Decoding human emotions will ensure that brands have a better understanding of their consumers leading to building deep-seeded engagement and long-term loyalty with them. With a potential revenue boost of 5% up for grabs, and weak emotional connections ready to be exploited by the competition, no retailer can afford to ignore this reality.”
So, what are emotionally engaged consumers looking for from the brands they love? According to the research, the keys are a feeling of reciprocation and personalisation. 81% claimed to enjoy giving back to a brand through promoting it to their social circle, but 86% expect this loyalty to reciprocated in two-way interactions. 75% want differentiated shopping experiences online, with 73% wanting this in store as well.
The report sets out four key components of creating emotional engagement. Firstly, respect customers by promoting honesty, trust and integrity. Secondly, reciprocate and build a two-way relationship with willing consumers. Thirdly, make an effort to recognise those who do engage with your brand and want they care about. Lastly, once the connection has been made, then comes the time to offer “timely, meaningful rewards” that focus on promoting long-term relationships.
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