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Forrester Research shows that brands may lose market share and revenue due to irrelevant offers and promotions
formationThe pioneer of machine learning-driven quotation optimization, today announced the results of a new study that reveals the gap between the quotations sent by brands and what consumers want. “The state of preferential relevance in 2021: bridging the relevance gap through optimization and automation,” The Forrester Research Thought Leadership Paper (TLP) found that nearly 70% of consumers believe that the offers they receive are irrelevant, which means that as consumer spending soars, brands are at risk of losing revenue and customers, because half of the American consumers will leave the brand if their competitors better meet their needs.
With the acceleration of the digital commerce experience that consumers have during COVID-19, the standards of relevance and value have risen sharply. As the company re-engages customers and re-establishes the relationship between online and offline channels, this intensifies the need to increase relevance. Research shows that although brands have great opportunities, many brands lag behind in creating relevance for customers:
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92% of companies think the quotes they send are relevant, but only 33% of the quotes are considered relevant by consumers
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Only 5% of consumers say that email offers meet their needs in a timely manner
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83% of consumers say they will buy from brands that send relevant offers
“As retailers and brands, we must build capabilities, journeys and offers, and through a deep and empathetic understanding of their values and needs, put the people we serve at our center.” Justin Weinstein (Justin Weinstein), Senior Director of Customer Experience at Giant Eagle.
Due to data privacy laws, cookie abandonment and the cancellation of IDFA, business-to-consumer (B2C) companies are entering an era of increasing acquisition costs. This makes the first-party data strategy even more important for brands, as it enables them to create deeper customer engagement and ultimately increase customer lifetime value (LTV) to offset rising acquisition costs. However, it is clear that many brands are lagging behind in how to use first-party data to create relevant offers and loyalty programs.
Formation.ai CEO Christian Selchau-Hansen said, “The world of loyalty is undergoing fundamental changes. If the company does not improve the way it interacts with existing customers, it will lose market share and eventually revenue. This is exactly what it is. The reason for this is crucial for brands to increase the relevance of their offers so that they can take advantage of the surge in consumer purchases that has occurred as the world reopens their businesses.”
Dynamic Quote Optimization: The Next Frontier of Business Growth
Optimized offers and loyalty represent the next frontier of business growth, and smart brands will use technology to maintain and accelerate post-pandemic growth through customer engagement. In fact, 71% of brands stated that they plan to continue investing in discount optimization technology to quickly create tailor-made offers for customers to drive deeper engagement.Brands must refocus on what is most important to customers and implement technical tools—for example Formation.ai’s dynamic quotation optimization platform – Keep up with rapidly changing consumer expectations and use automation to achieve higher operational efficiency, drive sales growth and improve customer satisfaction.
More information about surveys and TLP
The survey was conducted in April 2021 and surveyed approximately 252 North American decision makers responsible for the strategy or execution of loyalty programs and 1,000 American adults. The survey and related research aims to understand the views of loyalty executives, and to learn more about consumer attitudes and opinions on loyalty offers and digital marketing activities.A free copy of the full report is accessible https://formation.ai/offer-relevancy-will-save-the-b2c-marketing-funnel#form
About Forrester Consulting
Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. From short-term strategy meetings to customized projects, Forrester’s consulting services connect you directly with research analysts who apply expert insights to your specific business challenges.For more information, please visit go.forrester.com/consulting.
About formation
Formation’s dynamic offer optimization platform uses machine learning to automatically create, measure and optimize offers for individual customers. The platform activates your customer data and insights to provide 1:1 relevant offers using dynamic actions and rewards. Headquartered in San Francisco, Formation’s customers include major brands such as Starbucks, United Airlines and Giant Eagle.For more information, please visit Formation.ai. Formation also supports a community of digital and marketing leaders called Loyalty Innovators.For more information, please visit Loyal Innovator Network.
View the source version on businesswire.com: https://www.businesswire.com/news/home/20210616005723/en/
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