In an age where digital convenience often overshadows traditional interactions, brand loyalty is at a crossroads. While automated tools and data-driven strategies can save enterprise sellers countless hours and resources, many businesses have discovered that these solutions alone do not automatically translate to sustainable customer retention.
Sellers may be overlooking a critical component: the human touch. From delivering authenticity to investing in loyalty programs, human-driven interactions reinforce customer relationships – an essential building block for long-term brand loyalty.
In turbulent times, it’s only natural for consumers to become more financially cautious. While commerce brands should always seek to grow their organization, keeping existing customers happy is a solid strategy, particularly in a difficult economy where marketing budgets might be shrinking.
That said, the key question remains: are brands effectively addressing their customers' needs?
For the 2023 Evolution of Commerce Report, PayPal commissioned Forrester Consulting to conduct two surveys among enterprise businesses and consumers in five global markets: Australia, France, Germany, the United Kingdom, and the United States. We wanted to know precisely how companies and consumers are reacting to the economy, how prepared they feel for these challenges, and what their priorities are going into 2023.
In this report, we explore what it means to be loyal and, more importantly, what brands should do to keep customers on their side without breaking the bank.
At a time when no shopper wants to waste money, making sure they are buying an authentic – and therefore quality – product is high on the agenda of 63% of global consumers and 56% of US consumers.1 The same study also suggests that consumers around the world expect to see improvements in authenticity information and priority customer care over the next five years.1
To enhance brand loyalty through increased value and authenticity, consider:
With so many potential channels to interact with customers, it is tempting to default more to a fully digital way of doing business. Although customers appreciate the convenience that digital channels can bring, many are struggling with the digital-only approach.
Chatbots, while potentially useful in alleviating pressure on frontline customer service staff, have also drawn the ire of consumers. Research by Forrester Consulting commissioned by customer experience specialists Cyara found that almost 40% of interactions with chatbots were deemed negative by consumers and 50% of consumers said that interactions with chatbots often left them feeling frustrated.2
This is consistent with PayPal’s own research, which reveals that 33% of US consumers surveyed were frustrated by an inability to reach customer service when shopping with an e-commerce company.3
All evidence points to too much of the wrong contact potentially having an impact opposite to what companies intend – driving customers away, instead of keeping them close. So, instead of blindly relying on automated marketing and customer support tools, consider:
There is evidence that a growing proportion of consumers value loyalty offerings from businesses that they use. According to an in-depth survey of American consumers by gifting company Snappy, 70% of consumers report loyalty program offerings as key factor when choosing to give a business their money. Moreover, 72% will join a loyalty program before making their first purchase from a brand.4
Paypal’s own study conducted by Forrester shows that 42% of brands surveyed have already implemented a structured loyalty program, while 45% intend to offer experiential rewards and create customer referral programs.1
Unsurprisingly, from the consumer perspective, many care about companies having a built-in loyalty program where they can be rewarded for their continued purchasing.
Here are some ways businesses can add the human touch to their loyalty programs:
Nearly three-quarters (72%) of businesses prioritize aligning their organizations with charities and sustainability initiatives.5 The same study showed that nearly as many (68%) say they are implementing additional initiatives beyond standard loyalty programs to help their customers through the current economic crisis. The biggest motivator for these programs is because 34% believe customers care about companies’ political and societal stances.
However, given the evidence earlier in this report, businesses may see better brand loyalty by improving existing chatbots and making it easier to connect with live customer service representatives instead. Indeed, when asked about the tactics they were using to secure consumer loyalty, businesses leaned in the direction of more technology – 59% believed data analytics would give them the edge, and a further 51% were looking to create a frictionless shopping experience.5
So, while it’s important to align business values with those of your customers, enhancing direct engagement remains essential. Consider these avenues for improving customer interaction and loyalty:
36% of businesses say they are focused on — building emotional connections with consumers.1 However, it’s clear from our research that many are falling short. Customers don't just want products, answers to their questions, and recognition of their loyalty – they want them in a way that feels personal and genuinely considers their individual needs and preferences.
Ready to deepen brand loyalty with existing customers? Here’s a quick recap of effective strategies:
PayPal has remained at the forefront of the digital payment revolution for more than 20 years.
As of Q2'24, PayPal had 429 million customer active accounts globally.6 PayPal understands consumer preferences, shopping behaviors, and checkout optimization – and can help tailor your online experiences to grow and retain your customers.
To find out more, download the insights here.
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