March 23, 2015
Study: Apps are ‘new battleground’ in customer loyalty
If you’re hoping to win loyalty from your customers, then you’d better get your technology house in order. That’s the upshot of a global study commissioned by software giant CA Technologies.
The title of the study itself underscores the importance of technology in customer loyalty by referring to software — specifically apps — as the “new battleground” in the fight for loyalty. The study shows that businesses providing an inferior app experience risk losing 27 percent of their customers.
“We are entering the second wave of the application economy, one where an increasing number of consumers are adopting apps in their daily lives while businesses are racing to develop apps that meet all of their consumers’ needs,” CA Technologies says.
At DMA’s Interactive Marketing Week 2015, a session titled “How to Earn Customer Loyalty in 2015” will focus on challenges such as technology, as well as strategies and opportunities. At the session, results of a customer loyalty survey by Forrester Research and the DMA will be presented.
The CA Technologies study features results of a survey by Zogby Analytics of more than 6,700 consumers and 800 business decision-makers in 18 countries. The survey found that about half of consumers had used apps in the previous six months to:
- Complete banking transactions.
- Engage in social media.
- Research a purchase.
- Watch a video.
“Consumers no longer view applications as nice-to-have novelties. They now have a huge impact on customer loyalty,” said Andi Mann, vice president of strategic solutions at CA Technologies. “As businesses navigate a new, always connected reality that produces vast amounts of ambient data, they must react by delivering a personalized, secure and engaging application experience.”
In the study, consumers identified three tech-related factors that affect customer loyalty:
- Speed. 68 percent of consumers who had left a brand because of poor load times said a load time of six or fewer seconds was acceptable.
- Simplicity. Almost 80 of consumers ranked ease of use as a top motivator for using or buying an app.
- Security. Among users who’d had a fair or poor experience with a brand, 10 percent said they’d abandon a brand for good over poor app security.
While consumers place a premium on brands’ technology, some businesses don’t fully grasp the significance: Business decision-makers graded app quality higher than consumers did, according to the study.
“In order to tap into the growth potential of the application economy, businesses and governments must make software more than just a part of their business — it must become their business,” Mann said in a news release. “And to do this, they have to let their customers lead: Listen to them, understand their needs and apply the same rigor and predictive analysis to application development and deployment as they would to determine the best location for a retail store.”
However, technology alone won’t win over customers.
“Technology gets you 20 percent of the way there; the other 80 percent is what you do with it,” Bernardine Wu, founder and CEO of e-commerce consulting firm FitForCommerce, told retailers at the Shop.org Summit in November. “You need the support, buy-in and actions of many functions to have impact — marketing, merchandising, customer service technology, stores.”
Mobile Marketer cites cosmetics retailer Sephora as an example of a brand with a mobile app that successfully bridges the gap between the online and offline worlds, encompassing functions like customer loyalty, e-commerce and demos.
“Users build their own beauty profile from which Sephora can deliver relevant recommendations based on features such as skin type or eye color,” Mobile Marketer says. “The app provides a multichannel shopping experience via digestible media content and the option to create a favorites list … . Sephora’s omnichannel shopping experience makes it easier for customers to be customers.”
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