Almost a third (30%) of customers say rising costs are impacting their trust in brands with more than a fifth (22%) admitting loyalty to the businesses and organisations they normally buy from has declined in recent months.
This is according to new research from Ello Group, a specialist in acquisition, engagement and loyalty.
Eroding trust has come as brand switching has become the norm. The 1,000 consumer survey also revealed one in five have switched supermarkets, energy supplier or mobile provider in the past year.
As well as rising costs, close to a third (32%) of consumers say good customer service is one of the leading factors influencing their trust in brands. Yet, less than a fifth (18%) of respondents said they are happy with the customer service they receive from their current provider across the finance/banking, insurance, utilities, telecoms/mobile and retail sectors.
Tailored loyalty programmes that offer valuable rewards which help combat inflation are also proving an influencing factor, as the survey found three quarters (75%) of respondents would switch brands for a better loyalty program.
Michael Kalli, MD of Ello Group, said: “Many customers feel their hands are tied when it comes to purchasing choice at the moment. The rising cost of living means many have no choice but to go for the cheapest option. Price comparison sites are making this easier for customers to find the best deals and this is impacting brand loyalty.
“Despite the financial pressures, our survey shows that price isn’t everything. Customers are increasingly looking at what brands go the extra mile. Just as many care about how they are treated and are more likely to remain loyal to brands that have good customer service or offer something that could help lessen the strain on purse strings, for example through rewards that are actually meaningful.”
One in 10 customers also admitted that the sustainability credentials of a brand is a key factor in their purchasing decision.
Kalli said: “Customers are becoming increasingly conscious about their impact on the environment. Many realise that one of the key ways they can combat their carbon footprint is by buying from companies that are working on ways to limit their own environmental impact. Customers are putting their money where their mouth is and they want businesses to do the same.
“Brands that demonstrate their ethical credentials are in a much better position than competitors that aren’t as responsible regarding supply chain sourcing, employee treatment or paying taxes for instance.”