Brand loyalty destroyed by inaccurate billing

By By Amy Kellow | 7 February 2013

Incorrectly charging consumers and not responding to complaints are the biggest threats to Australian retailers wishing to establish long-term loyal consumers, according to a new report.

The findings are from The 2013 Consumer Loyalty Survey, conducted by international marketing services company Epsilon. It explored topics including what factors generated consumer loyalty towards a brand, how loyalty could be defined and which sectors had the highest percentage of loyal consumers. It studied the clothing, grocery, financial and travel sectors, and was undertaken by 408 Australians in mid-late 2012.

The most common reason why loyal consumers would switch a company was if they were billed incorrectly, according to the report. The highest percentage came from financial services, with 39% of loyal consumers saying they would make the switch. This was followed by travel with 34%, groceries with 32% and clothing with 30%.

The second reason likely to ensure a switch in company was if it didn't respond to loyal consumer requests and complaints. Travel and finance were equal with 34%, followed by clothing and groceries with respective scores of 32% and 30%.

Other reasons for changing brands included difficult return or refund policies, non-competitive pricing, and bad customer service and shopping experiences both in-store and online.

The study also discussed how consumer loyalty could be defined. Topping the list was the belief that their chosen retailer had superior quality even if it was more expensive than a competitor, with a total score of 48%. Next was word-of-mouth from family or friends with 40%, and having shopped with the company for more than three years with 40%. Loyalty was also defined as when a customer continued to choose a company even if it had made a mistake (38%) and a customer who was very familiar with the products of the company (32%).

The report revealed what factors influenced consumers to stay loyal to a brand, with best value for money topping the list with a total score of 58%. Consistently delivering quality products and services came second with 49%, followed by whether or not the customer felt valued at 36%.

Meanwhile, finance and grocery also topped the list as the sectors to have the highest percentage of consumers surveyed who claimed to be loyal, with equal 44%. The financial sector had fallen by two percent since 2011 when it had 46%, while groceries had grown by two percent since 2011's figure of 42%. The travel sector had also increased by two percent, with 28% of respondents saying they were loyal to their chosen brand.

However, the clothing sector had greatly built upon its 2011 figure of 16% and with 27% of survey respondents now saying they were loyal.

The report also found males to be marginally more loyal than females overall, with each sex attracting respective scores of 51% and 49%. The age group with the highest total percentage was 35-44 year-olds, followed closely by 25-34 and 45-54 year-olds. NSW was also revealed as the region with the highest total percentage at 32%. The region was also the leader of each sector, followed by Victoria, Queensland and Western Australia. South Australia, Australian Capital Territory and Tasmania were the three lowest-scoring regions.

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