THE PRICE IS RIGHT: INCENTIVES THAT STIMULATE SWITCHING BEHAVIOR

GLOBAL
11.18.2013
NIELSEN NEWSWIRE

The right price often makes the difference between a sale and a switch. In fact, across five different product or service attributes analyzed (price, service agreement, selection, feature or quality) in a Nielsen Global Survey of Loyalty Sentiment, offering the best price held the most persuasive power to motivate consumers to swap devotion to a brand, service provider or retailer.

Of the respondents who said they were not completely loyal, four in 10 (41%) said that getting a better price would encourage them to switch brands, service providers or retailers. While price was the major switch incentive for more than half of North Americans (61%) and Europeans (54%), price and quality held equal sway in Asia-Pacific and Middle East/Africa, with roughly one-third of respondents each in both countries. Twenty-eight percent of Latin Americans, 22 percent of Europeans and 20 percent of North Americans also cited quality as a reason to change their allegiances.

“While a good price may initially offer consumers enough motivation to change allegiance to a new product, it won’t keep consumers for long if the product doesn’t deliver on its promise,” said Julie Currie, senior vice president Global Loyalty, Nielsen. “Getting the price/value equation right, having products in stock, and offering a satisfying shopping experience are vital ways to build long-lasting customer loyalty.”

Beyond price and quality, 19 percent of respondents from Asia-Pacific and 18 percent from Latin America looked for a better service agreement, exceeding the global average (15%). Range or assortment was also most influential in Asia-Pacific (13%), compared to respondents in Europe (8%), North America (7%), Latin America (7%) and Middle East/Africa (5%). Globally, respondents found improved features (8%) the least influential in driving them to betray a brand, service provider or retailer.