Why disloyal customers is the new normal

According to a new study from Nielsen, 92 percent of all customers are disloyal and have no problems changing their brand. Not even one of ten consumers stick to their favorites.

Why disloyal customers is the new normal

Do you work in fast-moving consumer goods? Are you convinced that your customers are loyal? Then, unfortunately, you are wrong.
According to a new study from Nielsen, 92 percent of all customers are disloyal and have no problems changing their brand.

A real challenge, right? Not even one of ten consumers stick to their favorite – and most preferably, your product. Also, as many as 46 percents of consumers say they are more likely to try new brands than they did five years ago. Therefore, Nielsen argues, it is necessary to rethink the campaigns that focus on reaching or retaining loyal customers.

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Price is an essential factor

For example, it is clear that price is an essential factor, and the challenges for fast-moving consumer goods (FMCG) are evident. On the one hand, there is the so-called Amazon effect, which increases the choice and clarifies price differences. At the same time, the influences are many more than that. In China, for example, WeChat groups are looking for offers. In the UK, unlabeled fresh food is delivered to the door – at the same prices as in the supermarket. Traditional grocery stores are struggling to maintain profitability levels in a world where home deliveries are undermining margins. Nevertheless, brands, in all parts of the customer journey, continue to throw money at marketing that will increase loyalty – but without the right answer as to why. According to Nielsen, this is a mistake.

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Love trying new products

Here’s how: Consumers in developed markets are actively looking for new brands as the risk of buying “errors” decreases as income levels rise. Globally, 42 percent of consumers say they love trying new things, and another 49 percent – who still prefer what they are used to – can be convinced to switch. According to Nielsen, conventional product innovation is no longer about being the first or the best in the market but must fulfill a higher purpose to appeal to discerning consumers. Sure, the price is important but still less relevant than the perceived value. And this does not only apply to emerging markets.

In North America, Asia-Pacific and Western Europe, consumers have had access to a variety of products for decades. One-third of these consumers love new products, as the opportunity to be distracted and disloyal has long existed.

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Exposed to more choises

In Asia, Africa, the Middle East, and Latin America, however, retail and product assortment have been more informal and limited, often with only two to three product options per category. But as the development of more local brands, these consumers are also exposed to more choices, and the power of local products and regional supply chains is hitting hard on the major global players.

Ideals are important

Consumers are also aware of and engaged in broader issues than they did five years ago. Amid the growing number of products, they are more cautious about what they want to be associated with and quickly leave a brand that does not stand for their ideals. Since consumers are also less tied to well-known brands, these risk losing even more over time. Therefore, Nielsen says, marketing ahead must focus on the disloyal and not on the once you have for sure – since they hardly exist.

Read More Nielsen Report: Future Opportunities in FMCG E-commerce

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