Adam Gartenberg's Blog

Business Analytics and Optimization, IBM and Social Marketing

The importance of customer loyalty (and how to take advantage of it)

The June issue of STORES Magazine features an article by Patricia Waldron, worldwide distribution industry executive for Cognos.  The piece details how business analytics can help retailers drive greater customer loyalty and shopper advocacy in today's turbulent economy.

Smarter retailers are going one step further, preparing themselves to be in the strongest position when the economy improves. These retailers are focusing on their customers - understanding what appeals most to their loyal advocates, attracting new shoppers and determining what is important to consumers looking to shift their loyalties. These chains will be the ones that capture the lion’s share of the diminishing consumer wallet.

A recent IBM Institute for Business Value (IBV) survey of 30,000 U.S. consumers revealed that shoppers anxious due to economic conditions rely on retailers they trust. These "advocates" have nearly doubled from 21 percent in 2007 to 38 percent in 2008. Advocates are more likely to recommend preferred retailers to friends and family, and remain loyal even if other retailers offer competitive value. In fact, 31 percent of advocates even increased spend with their primary retailer over the past year.

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