The continuing price wars continue to impact customer purchase decisions across the airline, supermarket and telco industries making customers seemingly less loyal to one brand.

It seems the perception out there to attract new customers is to continuously slash prices (further eroding margins), offering the "best price on the shelf".

So many companies boast EDLP = Every Day Low Price. The majority of their customers are of a lower income bracket and find true value in heavily discounted products. That in itself may be seen as providing loyalty without a programme.

And while price seems to be a "quick fix" to attract customers, you have to ask yourself, what will happen to those customers once the war is over? This brings us back to the point we made earlier.

Short term campaigns to attract or win back customers will only last until your competitors offer the same or similar offering or until the campaign is over.

Typically, these campaigns run for a short period of time (e.g. 1- 2 months) and allow customers to collect 1 stamp or other mechanisms for a specific amount spent. The aim is to collect all stamps or credits by the end of the campaign, usually sending kids (and some adults) into a complete frenzy to collect, swap and barter their way to gathering all of them by the end of the campaign. These campaigns do yield phenomenal sales results for that period however, we find that often times these campaigns do not provide customer data for you to drive insights about your customers, nor do they encourage a two-way conversation with your customers through relevant and personalized communication. We've seen this for many years. Retailers find ways to attract parents of young children, using freebies and collectables as a way to lure them to their stores.

As previously mentioned, to create long term relationships with your customers you need to fully engage with them on an on-going basis, with relevant offers and communication. Your customers need to see the value of your offering over time, not on a short term basis. Long term strategies are required, that will yield the necessary interaction and engagement with your customers to position your brand top of mind, so they consciously choose your brand over another.

We strongly advise companies to start thinking beyond competing on price and short term incentives only. Some companies have already started shifting their focus beyond price. They have turned their attention to delivering value, great customer experience through the astute use of their customer data, allowing them to personalise and target their customer communication. By knowing their customers that much better through their loyalty programmes, brands have a competitive edge above their competitors.

Article provided by Truth