Epsilon sought to explore Chinese consumers’ definitions of brand loyalty and their loyalty motivations, as well as to compare the behaviour of loyalists versus non-loyalists.
The data-driven marketing solutions company conducted the research in the third quarter of 2014 via online channels and face-to-face interviews across mainland China, with 1,000 respondents classified into three socioeconomic classes.
Marketers aiming to win the loyalty of Chinese consumers must look beyond one-size-fits-all marketing programmes and develop data-backed targeting strategies to increase efficiency, according to Epsilon (which, we must note, sells services in that very area).
Brands that came out on top in the loyalty survey are those who are establishing the mechanisms to effectively communicate with and service customers—even after the sale is made.
In this year’s survey, quality, which is determined as a basic criterion in the West, topped the list of loyalty motivators in China for the first time ever (see below).
Product performance and endurance of quality have now trumped price in the mind of the Chinese consumer. Savvy ones no longer necessarily align with the most popular brands, nor with those brands which offer the most convenient locations, said Vivien Deng, China country leader at Epsilon. The exception is for lower income and college respondents, where having convenient locations is significantly more important.
Why China loves Apple
Affordability drives loyalty
The Chinese passion for luxury does not necessarily translate into brand loyalty, according to Epsilon’s survey. Globally, the Chinese may be the biggest buyers of luxury items, accounting for some 29 per cent of purchases last year according to Bain, but they do not feel a sense of allegiance to only a handful of brands as seen in other categories.
Luxury brands with first-mover advantage like Dior or Louis Vuitton are now finding that they are seen as old-fashioned. The recent trend of Chinese shoppers to turn their back on mainstream luxury brands is compounded by the fact that the whole category stalled last year following the government’s crackdown on gift-giving, which severely hurt mainland luxury sales.
Brands offering affordable luxury—Coach and Kate Spade, for example—are making headway with urban consumers who are opting for less opulent brands.
Channel their loyalty
To contend with the sheer scale of the China market, many brands blindly adhere to “360 degree marketing,” disbursing their investments across a wide variety of channels to reach as many consumers as possible. But Epsilon’s survey show that channel effectiveness varies drastically by sector.
E-commerce loyalists are accustomed to using a variety of digital channels including company websites (42%), email (35%), WeChat (34%), mobile apps (29%) and QQ (29%). Financial services loyalists prefer face-to-face interaction (44%) and text messaging (35%) among other digital channels. Grocery loyalists prefer in-store communications (62%) and are still agreeable to postal mail (24%).
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