Once loyal consumers defecting from CPG brands

ST. PETERSBURG, FL: One-third of the average consumer packaged goods (CPG's) brands' loyal customers defected between 2007 and 2008, with possible deep revenue costs, according to the results of the Losing Loyalty, The Consumer Defection Dilemma study.

ST. PETERSBURG, FL: One-third of the average consumer packaged goods (CPG's) brands' loyal customers defected between 2007 and 2008, with possible deep revenue costs, according to the results of the Losing Loyalty, The Consumer Defection Dilemma study.

The study was conducted by Pointer Media Network and the CMO Council. Pointer Media Network is a Catalina Marketing service that makes a database of millions of shopping transactions available to groups such as marketers. The CMO Council, with 4,500 members, provides thought leadership and networking opportunity to corporate marketing leaders.

The organizations studied the purchasing patterns of 34 million US shoppers for two years across 685 CPG brands and 24,000 retailers.

The research found that less than half (48%) of highly loyal customers, those defined as “shoppers who made 70% of their category purchases with a single brand during a 12-month period,” remained dedicated to the brand in 2008. In addition, 33% of these customers completely stopped buying the brand even while they continued purchasing items in the same product category.

Revenues for these brands could have increased between 4% and 25% had these customers remained loyal to these CPGs, according the press release announcing the study's results.

“Building long-term customer loyalty is arguably the most pressing issue marketers are facing,” said Dave Murray, EVP of the CMO Council in a statement. “As this study demonstrates, granular-level, predictive modeling advancements offer new opportunities for relevant and personalized consumer interactions. CPG brand managers must take action to address the financial impact of loyalty erosion by identifying and engaging with today's at-risk loyal consumers.”

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