The end of customer loyalty or the start of the open brand relationship?

TL;DR - Consumers want to “play the field” and are seeking out variety from multiple brands. Yet one fundamental principle remains unchanged: the expectation to be treated with respect. When exploring their brand options, consumers are placing practicality above all else. Read on to find out more about how you can build lasting customer relationships in this new era of brand loyalty. 

The 2023 edition of Twilio’s Relationship Economy report found that European consumers are now in “open relationships” with brands, akin to the concept in personal interactions. 

Twilio’s Relationship Economy Report 2023 – which surveyed over 6,000 consumers and 1,800 marketers across Europe – revealed that consumers have an emotional affinity towards an average of only 4.75 brands. Consumers are now seeking out variety and challenging the traditional notion of long-lasting brand loyalty. 

Gone are the days of unwavering loyalty to one brand over the other - the onus for a strong relationship now sits with the brand, not the consumer. 

Despite this shift away from monogamy, consumers universally value trustworthiness and consistency from brands. They prioritize brand honesty (44%) and reliability (41%) above all else, mirroring the qualities they most value in their personal romantic relationships.

Build strong relationships with customers the new relationship economy 

Brands need to be thoughtful about the way consumers approach relationships. Nowadays, a relationship doesn’t have to be lifelong or exclusive to be considered meaningful. A short-term engagement can still be genuine and courteous. 

It’s about being real and respectful in every interaction. This behavior shift is important for brands - while it might be harder to gain customer loyalty than a decade ago, the reward is much greater when they get it right.

Practicality over emotional connection

In this new landscape, expertise and efficiency are ranked higher than an emotional connection, reinforcing that loyalty stems from company action and is no longer a given based on the product or service alone. Companies need to demonstrate that they understand what each customer wants - the one size fits all cookie cutter approach is no longer going to work. 

The study revealed that 31% of consumers prioritise expertise when contacting brands, while 24% place a premium on efficiency - far surpassing the 15% of people who prioritise emotional connections. This represents a notable shift in priorities: just last year, the ‘E3 formula’ of efficiency, expertise and emotion were considered equal building blocks of customer engagement. 

However, it appears that brands may have “overcorrected” in their efforts to meet consumer demand for functional efficiency, as only 27% of European consumers reported that they are regularly made to feel special by brands. 

Consumers swiping left

The research revealed that some brands are struggling to keep pace with this ever changing consumer environment. Keeping up with evolving customer needs and behaviors emerged as the top challenge faced by marketing leaders (44%), ahead of knowing enough about their customers (42%), understanding their boundaries (42%), keeping things exciting (40%) and maintaining consistent experiences across channels (35%).

Consumers appear to agree that marketers are not always getting it right, with over four in five (81%) respondents reporting that they have “dumped” a brand. Following a lack of reliability (44%), the biggest brand turn-offs include a lack of communication or difficulty in getting a response (30%) and constant calling or messaging (28%). 

First party data as the key to success 

The study found that marketers are pinning their hopes on first-party data to build more respectful relationships in this new consumer environment.

As with anything, marketers need to strike the right balance and first-party data, aided by a CDP, can be a crucial ally in getting this right. Knowing which customer may be facing an issue or maybe hasn’t purchased in a while, are all helpful tools to getting this balance right. From sending personalized emails to one-off discounts all contribute to making customers feel heard and valued. 

As with personal relationships, the right amount of understanding and communication can go a long way. 

The emergence of AI will also make it easier for brands to build these unique interactions with every single customer and create longer lasting relationships, making it more likely they’ll be in the inner circle of their customers. 

Interested in knowing more about the Relationship Economy and how Twilio can help you in getting these relationships right? Download the 2023 Relationship Economy report here.