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Customer loyalty reins supreme in cost-of-living crisis

Published:  31 October, 2023

New research has unveiled the importance of providing consistently good experiences in hospitality, with nearly half of consumers saying just one or two bad experiences at a hospitality venue would cause them to feel less loyal to a brand.

The findings, from Zonal’s latest GO Technology report in partnership with CGA, surveyed more than 5,000 UK adults on the biggest drivers of loyalty to hospitality operators in a post-Covid world.

More than value for money or even discounts and deals, it appears that the key to driving loyalty among consumers is delivering consistently great experiences. A total of 49% said a few bad experiences is the number one reason they become less loyal.

The research also found that more than half (52%) of consumers say they now have higher expectations of the brands they are loyal to due to the cost-of-living crisis. The figure then rises to 64% among those in the 18-to-24-year-old age bracket.

“Brand loyalty is vital to the success of any hospitality businesses – a loyal customer base typically means higher visit-frequency and spend, which drives profit,” Olivia FitzGerald, chief sales and marketing officer, Zonal, said.

“However, this research shows that, in order to retain customer loyalty, it’s not enough to offer cheap prices or deliver good experiences some of the time. Consistently great experiences are the key to success.”

When quizzed on the main drivers of reduced loyalty, the following five reasons came out on top: a few bad experiences (49%), price rises (37%), one bad experience (24%), lack of value for money in the cost-of-living crisis (24%) and whether or not the company was involved in controversy (23%).

While loyalty schemes are not the main factors determining whether customers keep returning to a venue, well over half (58%) of consumers said that these schemes represent good value for money and nearly half (47%) of consumers have joined a loyalty scheme to save money since prices began to skyrocket.

Karl Chessell, director of hospitality operators and food, EMEA, at CGA added: “In a competitive and cash-conscious market, brand loyalty is more important than ever. But it’s also precarious, and something that is hard to win but also easy to lose. Consumers are ready and willing to stay loyal to their favourite brands or venues, but they also know that if they don’t get what they want, then there are plenty of other options to choose from.

“This research makes clear that operators have no short-cuts to loyalty: it can’t be achieved overnight or bought. True loyalty is organic and organic is only achieved through relentless focus on the fundamentals of hospitality over weeks, months and years. Consistency of delivery is operators’ biggest challenge, but it’s their biggest opportunity too.”