8th Jul 2021

The impact of bad interactions and unethical practices on brand loyalty


Brand loyalty is incredibly fragile and there are various factors impacting whether or not a consumer sticks with a company long-term. Many brands face fierce competition and consumers are increasingly conscious of who they shop with.

To shine a light on brand loyalty in the current climate and what’s impacting customer retention, we surveyed more than 2,000 UK consumers to gauge their thoughts. We explored what loyalty means to them, the sectors they’re most loyal to and what would result in them parting ways with a brand.

What’s impacting consumer loyalty?

Our research uncovered that for the vast majority of consumers (60%), bad interactions impact their loyalty to a brand and often result in them cutting ties. Half of all those surveyed also stated they would be willing to pay more if they knew the product/service was reliable and trusted, demonstrating the value placed by the consumer on reputation and quality of interactions between the provider and themselves.

Further to this, 27% admit they wouldn’t put up with a period of poor customer service, even if the product was good quality. Not only does the public value the way they are treated, they value how the business treats others and the world around us, with one in five admitting they would leave a brand if they engaged in unethical practices.

What may seem like an internal part of your business can have a significant impact on brand loyalty. If an organisation mistreats their employees by not paying them fairly or forcing them to work long hours, a quarter would be willing to switch allegiances to another brand.

Consumer concern for ethics isn’t exclusively linked to staff working conditions, societal issues now take a central place in the decision making of those surveyed. One in five want the brand they choose to have an active stance on environmental issues. Increasingly, brand loyalty is linked to the values of the individual.

It’s common knowledge that retaining existing customers is more cost-effective than acquiring new ones, but each and every consumer has a different perspective. It’s no longer a one size fits all situation and there are various factors businesses should have front of mind when it comes to developing their customer retention strategy.

Where do consumers believe it pays to be loyal?

On the sectors it pays to be loyal to, this is how various industries rank according to consumers:

  1. Retail (Supermarket)
  2. Mobile Providers
  3. Food Service and Restaurants
  4. Finance (Banking)
  5. Hotels and Hospitality
  6. Travel (Airlines, Trains)
  7. Utilities (Gas and Electricity Supply)
  8. Insurance (Home, Car, Life/Health)
  9. Telecoms (Landline, At-Home Broadband)
  10. Media (Streaming Services, TV, Music, Entertainment)
  11. Retail (Fashion)
  12. Leisure (Gyms, Cinemas)

We know there are multiple factors impacting brand loyalty and many consumers are now incredibly selective when it comes to who they buy from. While price and customer service have been key for some time, we’re now seeing factors like trust and aligning with brand values have a huge impact on how long a consumer sticks with a brand for.

Retaining existing customers is much more cost-effective than acquiring new ones, but each and every consumer has different requirements. And when we know that customers don’t feel it pays to be loyal, achieving loyalty isn’t easy. There are various things influencing brand loyalty but, above all, ensuring a customer-centric approach is essential for increasing rates of retention.

In adapting to the shifts in consumer behaviour businesses must take a holistic approach in strategy, ensuring it is best placed to retain and increase brand loyalty.

For further information, download our latest report, Brokering Better Loyalty: A guide for insurers on keeping customers loyal, below.

Download our report today

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