Inflation Drives Brand Loyalty Despite Price Increases
Updated: Jul 27
Study by Railsr finds that changes in macroeconomic conditions are impacting the way U.S. brands engage with customers
SANTA MONICA, CA, UNITED STATES, December 15, 2022 /EINPresswire.com/ -- Between inflation and a potential recession on the horizon, pocketbooks are tightening and consumers are becoming increasingly more thoughtful about their spending. Accordingly, Increasing consumer price sensitivity is the top customer retention pain point, according to a report that details the findings of a survey of 200 U.S. brands by Railsr, conducted in conjunction with Sapio Research. Despite this, 77% said they raised the price of their core products this year, and 70% said that inflation is driving customer loyalty.
“Brands that emphasise customer loyalty are better positioned to weather changes in spending habits and the impacts of inflation,” said Tiffany Johnson, Head of Product, North America, Railsr. “New customer acquisition will remain a challenge, but this is an area where financial products can intervene.”
75% of respondents said that credit cards and financial products have a positive impact on customer loyalty, but few feel that credit cards alone differentiate their brands. Rather, brands offer credit cards for customer acquisition; 48% use them to create recurring relationships with customers; and 42% to gather insights to inform their marketing / product strategies.
“Brands who invest in credit and loyalty programs see the greatest advantages,” added Johnson.
While credit cards are seen as being key to customer acquisition, loyalty programs have also become a workhorse. Nearly 60% of respondents said that loyalty programs improve the customer relationship. Half of respondents said that loyalty programs increase average order value and 43% said they increase total spend. 37% say loyalty programs provide valuable data for marketing. Yes, despite the benefits of loyalty programs, loyalty is often seen as a cost center, with 44% of respondents quoting cost as being the largest constraint on implementing an effective program.
Modern solutions improve on legacy systems and allow companies to benefit from credit and loyalty programs with turnkey solutions embedded within the core offer. Find out how companies are using financial products to fight inflation, what payment methods a new generation of buyers prefer, and how businesses can thrive in a time of economic uncertainty. Download the full report by clicking here.
Railsr is the world-leading embedded finance experiences platform. It helps brands put the customer experience at the heart of their business by using finance as a strategic engagement tool to deepen relationships, create increased brand relevance and generate revenue. The Railsr platform provides financial products and solutions, including banking and wallets, cards, credit and rewards. For more information about Railsr, go to: https://www.railsr.com/