Where Our Loyalties Lie Presentation

Where Our Loyalties Lie

Rebecca Huntley Director, The Ipsos Mackay Report

Brett TuckerMD, Ipsos Loyalty

Where Our Loyalties Lie PresentationWhat’s on for today…

Themes from The Ipsos Mackay Report research findingsLoyalty is about relationships

Review Where Our Loyalties Lie Survey companion piece from the Ipsos Loyalty team

Section 1 – Customer, Employee and Personal Loyalty

Section 2 – The Economics of LoyaltyQ&A and discussion

Ipsos Loyalty MD with 12+ years of MR experience with focus on customer satisfaction and loyalty research

Prior to Australia, Brett was with Ipsos Loyalty in the US designing, implementing and managing Loyalty programs for companies like Microsoft, US Bank, Diners Club, MSN and Yahoo!. Prior to joining Ipsos, Brett was a Senior Consultant with Harris Interactive’s Customer Loyalty division

BS from the Univ. of Washington (United States) with emphasis in marketing and org behavior.

Dr Rebecca Huntley is a researcher and author with a background in publishing, academia and politics. She holds degrees in law and film studies and a PhD in Gender Studies.

Rebecca is the Director of The Ipsos Mackay Report, now in its 33rd year. She is the author of two books, The World According to Y: Inside the New Adult Generation and Eating Between the Lines: food and equality in Australia.

She is a sought after commentator on social trends on radio, in print and on televisionDr. Rebecca

Huntley

Brett Tucker

Meet the Presenters

In Australia, Ipsos opened its doors in 1999

Since then, Ipsos has acquired TQA, Mackay Report, and Eureka Strategic Research

Ipsos Australia also owns the largest fieldwork companyin Australia, I-View. I-View employs over 1000 qualified market research interviewers with expertise in Door-to-Door, Central Location, Telephone, Mystery Shopping and Audits. ISO 20252 for Market Research

Ipsos now has four offices in Australia (Sydney, Melbourne, Brisbane and Canberra) and approximately 130 full time employees.

Ipsos publishes the widely publicised Ipsos Mackay Report and has recently been selected to conduct Australia’s second major readership survey

Ipsos in Australia

Where Our Loyalties Lie

Rebecca Huntley Director, The Ipsos Mackay Report

Themes from our

research findings

Loyalty is about relationships‘The only thing you feel obliged

to be 100% loyal to is your family.’

Against which all other forms of loyalty are measured

Intimate relationships set the benchmark

I’ve got a friend that I went to school with and we might not see each other for forever. But when we get back together it’s like we never left, we pick up

the threads instantly.

If you come back to where loyalty is in your everyday life, it’s your family. That’s the only loyalty you can really trust. It’s

the one that doesn’t shift.

Endures through thick and thin

Periods of adversity or absence the greatest test of its strength

What can Corporate Australia learn from the local café?

I’m loyal to my local café. I’ve been going to the same one for over six years.

You go back to the same café when you know them and they

know you.

The thing about a business, like my café, knowing your name is really important to me. It makes people feel good so they’ll keep coming back.

I have some friends who go to the same café even though the food and coffee is terrible, but they keep going

back because they’re loyal. The owners are really nice and know

them.

Loyalty can extend beyond family• Between employers and employees

“I’m very loyal to my boss because he is very loyal to me. He treats me very well, and loyalty, it doesn’t work one way, it works both ways.”

• Personal services (doctors, dentists, hairdressers)“I’m more loyal to people – friends and family. Or if I know the hairdresser, I stay with her. It’s all about people. That’s why I don’t care about supermarkets, there’s no contact with people.”

• Clients and customers“Even at work we are loyal to suppliers over price. There is a good relationship there. And we can rely on them. They are always there when they say they are going to be there. That’s massive.”

Reciprocity and trust are key

Trust and loyalty and respect. You can’t have one without the other really. You need both to have loyalty.

[Loyalty] has to benefit both parties to some degree. It doesn’t have to be financial or whatever, but it has to be some benefit.

It gives you a good feeling, satisfaction. A level of comfort and security.

Being trustworthy underpinned this reciprocity

It’s a two way street

This mutual exchange brought with it comfort and security

Local businesses

I go to my local greengrocer, not the supermarket. You pay more, but you get

conversation so you stay loyal.

Cafes, pubs & restaurants

I’m loyal to my local coffee shop. They know me there.

The church

I like to be loyal to my church because it is where I grew up, where my spiritual family is, where my interest is. I want to be loyal to my church. I’ve decided it is my spiritual house and I will be loyal to the end.

This elasticity of loyalty also extends to …

Loyalty to brands varied enormously

I’m loyal to my Mac. I’ve had like four iPods.

TechnologySome people are loyal to cars. My neighbour will only ever

buy Holdens. Won’t buy Ford. Hates Fords. Actually hates

them.

Cars

My loyalties have changed. I used to be a Playstation man but then Xbox brought out Fable and I have been Xbox ever since.

I have loyalty, in terms of products or consumables, if in the service I get something back that I think is above and beyond.

I think lots of companies don’t nurture that loyalty [to staff]. Because you are more loyal to a person than you are to a product.

Loyalty is to individual sales staff

Service keeps us loyal

You might shop at Target because you have had a good experience in the past. But I went in there to buy a few things and got shocking service. So they are on the blacklist now.

One bad experience could dismantle previous loyalties

Now let’s look at some data…

Brett TuckerMD, Ipsos Loyalty

The surveyWe asked Australians….

Where do your loyalties lie? (loyalty measured across ~30 variables)

How loyal are you to your employer? Do you have the propensity to be a loyal customer? As a consumer, what are the drivers of your loyalty across six

industries?

Specifically, who did we talk to?

Count n %18-29 YO 307 15%30-39 YO 474 23%40-49 YO 549 26%50-59 YO 485 23%60-69 YO 234 11%70 and Over 46 2%

Count n %

Employed, full-time 1045 50%

Employed, part-time 522 25%

Self-employed 275 13%

Home duties 46 2%

Student 28 1%

Retired 114 5%

Currently unemployed 46 2%

Other 18 1%

Don't know / No answer 1 0%

Count n %

Single - living alone 229 11%

Single - living in share accommodation 168 8%

Couple with no children 403 19%

Family - mostly pre-school aged children 259 12%

Family - mostly primary school aged children 248 12%

Family - mostly high school aged children 214 10%

Family - mostly adult children 266 13%

Family whose children have left home 308 15%

Count n %Male 1048 50%Female 1047 50%

Count n %Australian Labor Party 471 22%Liberal Party 486 23%The Nationals 37 2%Australian Greens 155 7%Australian Democrats 22 1%One Nation 13 1%Family First 42 2%Other (Please Specify) 21 1%No affiliation 973 46%

What did we find?

When thinking about loyalty… family, friends and Australia clearly rose to the top

If you come back to where your loyalty is in your

everyday life, it’s your family. That’s the only loyalty you can really trust. It’s the one that

doesn’t shift.

My mum only buys orange juice that’s made with Australian

oranges. She feels like even though she’s not being loyal to a particular

brand, she feels like she’s been loyal to the Australian orange

growers

Country before brands

Family first

Family

Your spouse/ partner/significant other

Friends

Australia

Pets

Your employer

A particular doctor

Favourite sporting team

A particular hairdresser

93%

93%

87%

84%

81%

68%

61%

53%

48%

And the top 10 are…

With politics, my family used to vote a certain way and then I voted that way out of loyalty. And then I realised I needed to think for myself and process these issues for myself. We need to reconsider why we are loyal.

Has loyalty to politics

changed?

From an overall loyalty perspective… politics & politicians rate poorly

Your primary wealth management firm or fund

A particular online news source

A particular beer

A particular butcher

Favoured political party

A particular department store brand

A particular wealth manager or fund manager

Favoured federal political leader

Favoured state political leader

A particular clothing brand

30%

29%

29%

27%

27%

25%

24%

21%

17%

14%

And the bottom 10 are…

How do our loyalties lie together?

Primary wealth

management firm

or fund

Particular wealth

manager

Main

superannuation

fund

Main financial

institution

Federal political leader

State political leader

Political party

Grocery store

brand

Grocery store

location

Department store

brand

Mobile phone

handset brand

Friends

FamilySpouse/partner

Australia

Pets

Print news source

Online news source

Television news

source

Radio news

source or talk

show

Particular beer

Particular butcher

Does loyalty to family & friends = loyalty to employers and products?

Loyalty to family is the real thing. So when you are talking about

loyalty to makeup and credit cards, it is meaningless. It’s all marketing.

It’s all about people trying to tap into something that has real

meaning to try and sell a productI’m loyal to my friends and family. I’m also fiercely protective. I’m not

the same with products.

Employeeloyalty

Personalloyalty

Customerloyalty

3%

4%

2%

The answer is no… looking at the different forms of loyalty

Our loyalties to other people, employers and products are unique

A new generation?

There’s no loyalty in the ‘me, me generation’. A generation

like any other?

I see with my kids they are loyal to their parents. And to their employers as well. Loyal to friends, not sure. It’s a transitional stage so they flit from group to group.

Generational differences regarding loyalty? Opinions differ…

Loyalty is declining in our society

I only show loyalty to organizations that are loyal to me

It's harder to be loyal nowadays because there are more choices

Most organizations do a good job of encouraging loyalty nowadays

I will remain loyal to my workplace even if I get offered higher pay elsewhere

Most organizations do a good job of recognizing loyal customers nowadays

Loyalty is an old-fashioned concept

87%

84%

75%

55%

55%

53%

42%

Chart Title

The concept of loyalty

Loyalty is declining in our society

I only show loyalty to organizations that are loyal to me

It's harder to be loyal nowadays because there are more choices

Most organizations do a good job of encouraging loyalty nowadays

I will remain loyal to my workplace even if I get offered higher pay elsewhere

Most organizations do a good job of recognizing loyal customers nowadays

Loyalty is an old-fashioned concept

GenY Gen X Boomer

The concept of loyalty across generations

Real person in customer service call center

More assistance instore

Automatic discounts based on shopping frequency

Instant cash rewards at checkout

The value proposition is different by generation…

GenY Gen X Boomer

Do the forms of loyalty decline with age?

18-29 years 30-39 years 40-49 years 50-59 years 60-69 years 70+ years50%

60%

70%

80%

90%

100%

Personal Loyalty Employee Loyalty Customer Loyalty

Woman in her 40’s

I’m loyal to my husband because I wouldn’t want

another man to see me naked at this age.

Bunch of blokes

Man 1: Can you guys say your loyal to girls, apart from family members?

Man 2: Nope.

Man 3: No.

Man 4: But with girlfriends it’s a bit different. But it’s still bros before hoes!!

Loyalty differences between men and women...

Personal Loyalty Employee Loyalty Customer Loyalty

91%

71%67%

94%

74%

67%

Male Female

No gender difference really…

The economics of loyalty

The “Where Our Loyalties Lie” industry surveyWe surveyed people about their attitudes and behaviours relative to six industries

Automotive Banking Insurance Grocers Mobile services Wealth management

CUSTOMER LOYALTY

Share of Wallet

Advocacy

Customer Retention

Customer loyalty defined

Advocacy

Automotive Banking Insurance Grocer Mobile Wealth management

83%

61%67%

61%

47%

64%68%

42%37%

46%

35%

46%

Likely to recommend (rated 7 - 10) Actual advocate

I said I’d recommend… but will I?

Automotive Banking Insurance Grocer Mobile Wealth management-2

-1

0

1

2

3

31

-10 -3-15

-35

-4

NPS Actual Advocacy

Are NPS and Actual Advocacy the same thing?

Mea

n nu

mbe

r of r

ecom

men

datio

ns

Likelihood to recommend

(NPS)

Actualrecommendation Acquisition

Linking intent to advocacy to acquisition

The car itself (features, design etc)

Price

The reputation of the company

Previous experience with the brand

Friends or family recommended it to me

A special offer or promotion

The experience at the dealership

I saw / read positive comments somewhere else (print, TV, etc)

I saw / read positive comments in the web

Great advertising and image of the brand

The financing options offered

The loyalty / rewards scheme

77%

52%

36%

34%

14%

13%

12%

10%

7%

6%

4%

2%

Reasons for choosing your current car


Loyalty/rewards scheme

Previous experience with this bank

Fees and Interest rates



The experience at the branches

Quality of the products and services

The range of products offered






44%

38%

34%

26%

26%

25%

20%

8%

4%

4%

2%

1%

Reasons for choosing your primary bank



Price



Quality of products and services

It was convenient at the time

Range of policies




My broker / dealer recommended it to me




60%

36%

36%

27%

25%

21%

16%

12%

8%

6%

5%

3%

1%

Reasons for choosing your insurance provider



Convenient location

Prices

Range of products


Previous experience at the shop

The shop layout



The staff at the shop

The reputation of the grocer





71%

47%

41%

29%

22%

18%

10%

10%

10%

6%

3%

3%

1%

1%

Reasons for choosing your primary grocery store



Price

Previous experience with the company


Quality of the services



Range of handsets available

It was the only company available when I needed it





57%

35%

32%

29%

22%

22%

20%

12%

7%

5%

3%

2%

Reasons for choosing your mobile provider



Customer Retention

Likelihood to remain a customer (repurchase brand)

Brandpreference

Share of wallet

Trend in recent behaviour

Attitudinal loyalty

Behavioural loyalty

Customer retention is about Attitudes and Behaviour

Loyalty Index has strong ties to retention

Only 24% of those who were classified as High Loyals had changed providers 12 months later

Ipsos surveyed 10,000 customers of different brands in different sectors; and surveyed them again a year on. The variables that best predicted Loyalty were used to create the Ipsos Loyalty Index.

We use our Ipsos Loyalty Index to understand customer retention

Shall we look at some of the results?

Ipsos Loyalty Index Brand Preference Likelihood to continue Share of banking business

Trend in recent behav-iour

54%

66%

77%82%

25%

54%

78%82%

67%

34%

79%73%

Top 4 banks (2009) Top 4 banks (2011) Other banks (2009) Other banks (2011)

Banking loyalty – Key Measures - 2009 vs 2011

Ipsos Loyalty Index

figures are available in

industry reports

Ipsos Loyalty Index Brand Preference Likelihood to continue Share of banking business


72%

81% 80%

27%

61%

73%79%

25%

77%80%

73%

27%

ANZ NAB/CBA/W Other banks (2011)

A company level view – Retail Banking

Ipsos Loyalty Index


industry reports

Ipsos Loyalty Index Brand Preference Likelihood to continue Share of shopping business


78%

88%81%

74%74%

87%80% 81%83%

94%

80%

71%

Coles Woolworths Other

A company level view – Grocery

Ipsos Loyalty Index


industry reports

Ipsos Loyalty Index Brand Preference Likelihood to continue Share of mobile business


57%

71%

83%

52%

67%75%

70%

39%

53%

63%

53%

31%

Telstra Optus Other

A company level view – Mobile

Ipsos Loyalty Index


industry reports

Ipsos Loyalty Index Brand Preference Likelihood to continue Share of insurance business


66%

75% 73%

32%

66%73% 70%

35%

76% 76% 77%

31%

69%

80%

71%

33%

AAMI Allianz NRMA Others

A company level view – Insurance

Ipsos Loyalty Index


industry reports

Customer serviceStaff knowledge

Staff friendliness

Checkout wait

Complaints handling

Range

Shelve stockingPrices

Convenient location

Hours

Cleanliness

Layout

Rewards

Parking

Australian norm

Coles

Woolworths

Others

Going a level deeper – Experience Drivers - Grocery

Familiar

Popular

Differentiation

Relevance

Satisfaction

Quality

Affinity

Trust

Willing to pay

Competitive prices

Innovative

More reasons to use

Australian norm

Coles

Woolworths

Others

Going a level deeper – Brand Drivers - Grocery

Share of Wallet

Share of wallet models

Customers with 1 product

Customers with 2+ products

Wealth management

GroceryColes

monthly spend

Coles monthly

spend

Share of Wallet

Advocacy

Customer Retention

Applying this approach to your business

1st half 2011 – 6 new industry loyalty studies: Automotive, Retail Banking, Insurance, Wealth Management, Groceries, and Mobile

The reports will cover: Acquisition and advocacy Loyalty Customer satisfaction Drivers of loyalty Segmentation

The Ipsos Loyalty 2011 Industry Reports

The Ipsos Mackay 2011 report programMIND & MOOD PORTRAITS MIND & MOOD STUDIES

Young Families Aug

Mind & Mood April

Mind & Mood October

ISSUE REPORTS

Affluent Urbanites Feb Being Australian June

How We Use Media Dec

Questions & Discussion

Thank you

For more information contact:

Rebecca Huntley+61 2 9900 5100

[email protected]

Brett Tucker+61 2 9900 5130

[email protected]

Where Our Loyalties Lie Presentation

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Transcript of Where Our Loyalties Lie Presentation