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