Consumers have changed their shopping behaviours and values in response to the recession, according to a white paper from Aimia, which concluded that marketers urgently need to optimise their customer loyalty strategies to build stronger connections with today's 'savvy consumer'. This article is copyright 2013 The Best Customer Guide.

The white paper, entitled 'The rise of the savvy shopper: The impact of the recession on customer loyalty', acknowledged that the traditional approach of rampant promotions and steep discounting does drive short-term results amid a tough economic climate, but also found that today's consumers also want to be rewarded and recognised for their loyalty to their chosen brands.

The white paper examined both attitudinal and transactional research carried out by Aimia among 2,000 UK consumers, and found that a new breed of consumer - what Aimia calls 'the savvy shopper' - has emerged. For example, the study found that:

  • 64% of UK shoppers are actively using reward programmes;
  • 78% admit to collecting points whenever they can;
  • 66% say they always use vouchers or coupons when shopping;
  • 77% are more careful with money than they used to be.

Consumers now expect brands to work harder for their loyalty and demonstrates how many brands have subsequently adjusted their value propositions to build loyalty in response to these new consumer norms. Marketers must therefore recognise that today's consumer has evolved and the route to true loyalty has become harder to navigate. They must fundamentally change the way they build loyalty with these newly discriminating consumers, leveraging shopper data and insight to understand customers better, and use the tools of loyalty management to influence behaviours and build lasting relationships.

Aimia's research suggests that it's largely down to the marketer to unlock a data-focused optimum loyalty formula, bespoke to each marketer's organisation. Consequently, the company has compiled the following ten steps for marketers explaining how to use reward, recognition and loyalty programmes to build real relationships with today's savvy shopper:

  1. Design rewards to appeal to specific behaviour segments
    By understanding which behaviour segments make up your customer base, you can design rewards to appeal to their needs.
  2. Avoid drastic programme changes
    When evolving your reward programme, tread carefully. Roll out changes over time, and give your customers enough time to absorb the shock.
  3. Use data to personalise
    Personalise customer interactions by using your customer data to create shopper profiles and identify likely next purchases.
  4. Empower your frontline staff
    If customers experience problems, make sure your frontline staff have the training and authority to offer real-time solutions.
  5. Use data to get closer to your customers
    Target your marketing directly to customers rather than through third-party channels.
  6. Rectify and reassure in real time
    Hearing what consumers have to say about your business on social media channels is an effective way for you to check your business is delivering on its brand promises.
  7. Make your customers feel like individuals
    A 'one-size-fits-all' approach to customer relations is no longer relevant or appropriate.
  8. Invest in long-term customer value
    Investment in loyalty comes not solely from quarterly impact, but from customer lifetime value. Use data and customer insight to drive profitable behaviour change over the long term, and the compounding effect of your loyalty investment will pay dividends over time.
  9. Aspire to be more than just a loyalty programme
    Make your loyalty programme more distinctive, connect your brand with new and exciting experiences to create true value and stand-out.
  10. This is no time for ease and comfort
    The world of consumers and businesses is changing. While we have seen the UK consumer adapt to the new retail landscape and become savvier, some businesses have been left behind. For these businesses, the time to adapt and do things differently is now.

"While the recession has altered the way consumers evaluate brands and make purchase decisions, the fundamental rules of customer loyalty still apply," explained Maria Sealey, director of research services for Aimia. "The new 'savvy shoppers' expect savvier marketers - and to build relationships with them, marketers must focus on the basic loyalty drivers while using data science and customer insight to deliver targeted combinations of reward and recognition. There is not a one-size-fits-all approach; instead marketers must make the best use of data available to them to tailor their efforts accordingly."