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The truth about customer loyalty

The truth about customer loyalty

Brands and retailers need to refine their loyalty value proposition. Our research suggests that four factors should be considered when revamping a loyalty program.

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Customer loyalty

Dubai, 06 February 2020: In a competitive world, acquiring consumers is more expensive than retaining them, and loyal consumers are invaluable as a reliable repeat source of revenue. According to KPMG’s survey, “The truth about customer loyalty”, product quality emerges as the top factor that inspires loyalty among UAE consumers (77%), while value for money, customer service and product consistency all place second at 66%.

The report also found that 45% of UAE respondents identify points and rewards as an important factor in earning and keeping their loyalty. Also, 14% of UAE-based consumers say that they do not belong to loyalty programs as they do not want their data to be tracked. Consumers similarly feel that signing up and redeeming their rewards is still problematic, while some cite lack of awareness and no interest in loyalty benefits.

Pilar De Miguel Veira, Partner and Head of Customer Experience at KPMG Lower Gulf, said: “The future of loyalty programs is most likely to depend on an organization’s understanding of customer needs. One of the ways to obtain such an understanding is by data collection as well as the organization’s ability to improve consumers’ experience at every step of the customer lifecycle. Loyalty is not only dependent on perks and discounts but it should grow with each and every interaction.”

The survey found that one in five consumers in the UAE saw personalization, be it in terms of service, communication, or promotions and offers, as a leading benefit of loyalty programs. The survey results reveal that material rewards such as cashback and discounts are the most valued features for local customers. Furthermore, corporate transparency and honesty were more likely to earn consumer loyalty than points and rewards.

The findings also suggest that 94% of UAE consumers would prefer if organizations explored new ways to compensate repeat shoppers. Therefore, there could be an opportunity in developing and growing loyalty programs to positively impact customer experience. When considering revamping of existing loyalty schemes, organizations should consider four factors: make loyalty programs easier to use; clarify their purpose; raise awareness and consider new ways to reward loyalty.

The UAE survey findings echo the global survey, where 74% of consumers said product quality inspired loyalty, followed by value for money (66%) and customer service (56%). In addition 37% of global respondents identified points and rewards as an important factor in earning and keeping their loyalty.

For more information and to read the report, please visit kpmg.com/ae

 

ENDS

Notes to Editors:

About the report

The 2019 KPMG “The Truth About Customer Loyalty” report surveyed 18,520 consumers from more than 20 countries, including 563 residing in the UAE, to explore the truth about customer loyalty and how brands and retailers can attract and retain customer loyalty through enhancing customer loyalty programs. This survey was conducted online during the third and fourth quarters of 2019.

About KPMG International

KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 147 countries and territories and have 219,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

For media enquiries, please contact:

Mara Carpencu

+971 4 506 5563

mara.carpencu@bpgorange.com

Dharti Chatterjee

+971 4 506 5561

dharti.chatterjee@bpgorange.com

© 2020 KPMG Lower Gulf Limited, registered in the UAE and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the United Arab Emirates. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.

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