Customers ditch favourite brands for better value
The Current Account Switch Service (CASS) found that while 55% of consumers remain just as loyal to their preferred brands as before the pandemic began, more are being tempted to look for better value for money.
CASS found brand loyalty is particularly prevalent in relation to banks and building societies (30%), supermarkets (25%), mobile phone manufacturers (20%) and insurance (18%) providers.
However, while most people know the brands they like to buy from, four out of 10 (39%) are now looking for better value for money when it comes to some of the goods and services they purchase.
People are also increasingly aware of how brands align with their personal views. A quarter (26%) of people would be motivated to switch to a more ethically conscious brand, and 20% to a brand that was found to be more environmentally aligned to their views.
CASS found that “default loyalty” is particularly prevalent in the current account market. It found that 29% of those that feel less likely to switch (post-pandemic) say that their existing provider’s performance through the pandemic has boosted their sense of loyalty. This is despite alternative current account options offering a better fit for their needs. One in five (22%) of this group also claim to be too busy to switch current account.
When asked how they feel towards their existing current account provider, 33% claim to be very loyal and that it would take a lot to see any benefit in switching. One in eight (12%) claim they wouldn’t ever switch to another provider.
However, nearly one in five (18%) feel that the cost-of-living crisis is forcing them to seek out additional help like overdraft facilities while one in 10 (11%) believe that they now need banking services that can help them better track their spending.
This blog tells how one Santander customer ditched the bank after 30 years to take up a switching offer with Natwest.
Jo Ainsley, senior service lines manager at Pay.UK, said: “Given the current cost-of living- crisis, many people are now thinking carefully about their finance. While breaking brand loyalty to certain products and services can be difficult, switching to better options in many cases can be incredibly simple and stress-free. Switching current account is a great example of this.”
Kate Nightingale, consumer psychologist, said: “The unprecedented nature of the pandemic plunged many of us in a deep state of anxiety. As such, we’ve turned to brands that provide us with a sense of familiarity. This ‘default loyalty’ shouldn’t stand in the way of our wellbeing.
“With price pressures mounting, it’s now increasingly important that people challenge their own perceptions and think critically about how considering a new provider that could better align with their needs and help them save money.”