Brands need to win their customers’ share of heart

Brands need to see loyalty as an experience, not just a program. Consumers are still looking for value from brands, but it’s becoming less about points and rewards and more about connecting with customers on an emotional level to win ‘share of heart’. These are the main findings from Epsilon’s Customer Loyalty Index – UK 2024.

Created to support marketers looking to find new and innovative ways of building loyalty with customers, the research examined the nature of loyalty, based on a study of more than 2,000 consumers in the UK and their expectations of brands in four categories: fashion, electronics, grocery and banking. 

It showed that when it comes to customer loyalty, a one-size-fits-all approach simply doesn’t work anymore.

There are further shifts in loyalty behind the scenes. It is still very much a priority for practitioners in all markets and regions: CX Network’s research into the Global State of CX in 2024 confirmed that loyalty – along with employee experience – was one of only two non-tech trends to dominate the top 10 CX trends. However, spending on loyalty is in decline: While customer loyalty and retention was the most selected investment priority for practitioners in 2023, it did not make the top 10 in 2024. 

The Customer Loyalty Index measured loyalty through three components: drivers, attitudes and behaviors. By using linear regression-based modelling and machine learning to analyze consumer responses to questions relating to their interactions with a brand alongside their perceptions of a brand, it identified fundamental and accelerating loyalty drivers that predict future customer behavior. 

The findings demonstrated that attitudinal loyalty – including share of mind, share of heart and share of value – is in fact what drives behavioral loyalty – share of category, share of wallet, share of time. In fact, attitudinal loyalty is the key to optimizing and measuring true customer loyalty over time.

Fundamental loyalty drivers

Of course, fundamental loyalty drivers including quality, price and service must be on point. 
The study demonstrated the pivotal role these fundamentals play in driving customer loyalty and how it is entirely possible to be successful without a traditional loyalty program where points and rewards are designed to boost customer loyalty, if your fundamentals are well aligned with your customers values and expectations. 

Aldi, which doesn’t have a loyalty program, is a prime example of this, having scored the highest out of the 10 brands within the grocery category in terms of attitudinal and behavioral loyalty. 

Key to Aldi’s higher index score was the fundamental drivers where it outperformed other brands by as much as 12 percent, having always focused on a low-cost, no-frills approach to retail. 

Rather than tailoring offerings to individual customers, Aldi’s business model revolves around offering a consistent product range at competitive prices – and clearly, consumers appreciate this. 

Deepening the connection with customers through loyalty accelerators

In an increasingly crowded market, brands have no choice but to stand out. 

To remain competitive over time it is essential to look at new ways to accelerate customer loyalty beyond the fundamentals. The study demonstrated that the type of loyalty accelerators, the levers a brand can pull to create deeper connections through strategies such as a loyalty program, differ from vertical to vertical. 

This likely rings true from customer segment to customer segment and individual to individual, which is why these efforts must always go hand in hand with personalization. 

Each individual customer wants something different from a brand, so crafting successful loyalty strategies requires combining data-driven insights with a good dose of creativity. 

Deep customer insights will enable brands to truly understand their audience and deliver authentic, engaging experiences that align both the brand and consumers’ values to create that all-important, shared sense of purpose.

This means going beyond surface-level demographics to active listening to fully understand consumer passions, lifestyle and aspirations, and using these to connect with them emotionally. 

This approach will build strong and long-lasting emotional connections with customers, but it needs constant care and attention. 

Loyalty is not a destination, but something that needs to evolve along with consumer attitudes.

It's also about creating authentic engagement with customers through transparency, honesty, consistency in actions and messaging, and managing expectations. It means ensuring customers know what to expect and as such, feel they are getting the right value and quality in the services or products they are being promised. This builds trust – and trust is key to fostering deeper relationships. 

Brands also need to ensure they are defining key metrics to measuring value and quality around things like customer satisfaction levels, lifetime value and net promoter scores.

Thinking beyond loyalty programs

One great example for an outstanding loyalty strategy is Coral. It launched the Coral Racing Club, offering members immersive racehorse ownership experiences. Through exclusive updates, behind-the-scenes access and potential prize money, it created a strong sense of community and shared passion among horse racing enthusiasts. 

In an industry driven by best odds and free bets, Coral found a way to connect with customers on a deeper level. 

This is reflected in Epsilon’s index where ‘share of heart’ was the key driver in impacting consumer attitudes, emphasizing the role of customers’ emotions and experiences.

There is still huge untapped potential for loyalty marketers and the Loyalty Index highlighted the need to think beyond the concept of traditional loyalty programs. As well as getting the fundamental customer experience factors right, these include creating compelling reasons for return visits beyond financial incentives, creative differentiation, harnessing customer service and technology to build engagement and trust, and true personalization. 

You need to be in for the long ride, but those who can successfully combine personalization and exceptional experiences will see a huge boost in customer loyalty.

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