Customer loyalty hits rock bottom


– over two-thirds of shoppers show brand loyalty is waning –

London, UK – October 25, 2007 – Almost half of all shoppers (48 per cent) fail to remain loyal to a favourite brand if a competitor is running a special offer. This is according to a survey of more than 1,000 shoppers by TNS, on behalf of business intelligence (BI) and performance management solutions provider, Cognos.

A further 24 per cent are unsure whether they would purchase a preferred brand when presented with rival offers, suggesting they may consider swapping if the offer was enticing enough. The social grouping with the most disposable income, ABC1, is the most likely to shop around (53 per cent) for a bargain.

“More than ever, the 21st century shopping experience is being driven by the consumer. Customers have so much choice at their fingertips, and the culture has clearly shifted to looking for the best deal available rather than maintaining brand loyalty,” said Patricia Vekich Waldron, Global Retail Industry Director at Cognos.

“This research is a wake up call for retailers. With only 28 per cent of customers saying they would remain loyal to a brand, there has never been more pressure to understand what appeals to customers today, and act on this information faster than competitors.”

The survey also reveals that buy one get one free (BOGOF) remains the nation’s preferred special offer with 77 per cent of shoppers naming it is as their favourite. 81 per cent of women preferred this deal compared to 74 per cent of men

“BOGOF may be the most popular with shoppers across all age ranges, but it is not commercially viable across all products, and may not build long-term loyalty,” continued Vekich Waldron.

“Introducing promotions that will not only attract customers to a store or brand, but also be good for the bottom line, is a science, which cannot be left to gut-feel decisions or chance.”

“Retailers must have accurate information about shopping trends, as well as scenerio modelling capabilities to accurately forecast how different promotions such as extra loyalty points or buy one, get one half price, will perform and how they will impact sales and profits. It is the only way retailers can make the right decisions in a fast moving retail sector where consumer preferences and loyalty changes frequently.”

About Cognos, an IBM Company
Cognos, an IBM company, is the world leader in business intelligence and performance management solutions.

It provides world-class enterprise planning and BI software and services to help companies plan, understand and manage financial and operational performance.
Cognos was acquired by IBM in January 2008.

For more information, visit http://www.ibm.com/software/data/ and http://www.cognos.com/uk/

For further information about Cognos, please contact:
Katy Lyons or Farimah Saadat at LEWIS, the PR agency

Telephone: +44 (0)20 7802 2626
Fax: +44 (0)20 7802 2627
www.lewispr.com

For sales enquiries call:
Tel: +44 (0) 1344 486 668
www.cognos.com/uk