Customer habit and fear can no longer be mistaken for loyalty

Artificial intelligence is changing how people discover and evaluate products and services. Data collaboration company LiveRamp brought together senior Australian marketing leaders to ask what businesses need to do to keep their customers.

Once upon a time, brand loyalty could be bought with points and discounts and measured in memberships. Today, membership in loyalty programs is falling, and artificial intelligence is making it easier than ever to find new brands, compare deals and make the switch. It’s becoming clear that what many businesses record as customer loyalty is something far less valuable: habit.

At a recent LiveRamp roundtable, Rick van Emmerik, chief marketing officer of Tangerine Telecom, noted that around a third of NBN customers have never switched providers. Telecommunications is one of Australia’s most distrusted industries, and van Emmerik pointed to fear rather than loyalty as a driver of those figures.

“There’s this cloak of mystery that makes it feel threatening. What AI will destroy is unearned loyalty, because customers can finally interrogate whether switching is hard, or whether they’ve just assumed it is,” said van Emmerik.

Melanie Hoptman, LiveRamp VP and MD brands APAC, agreed there will be “a shift across utilities, telco, insurance, those kinds of industries”.

“People have a lot of access to new information at their fingertips. Machines are now asking: ‘Have you considered this? What about this?’

“People are willing to put a lot of information into these platforms. ‘Here’s all my life insurance. Help me.’ Claude says, ‘Let me tell you what you should be doing. Drop that. You don’t need that. Consolidate that. Think about this’.”

AI search levels the field for price-sensitive consumers

Travis Clinger, LiveRamp chief connectivity and ecosystem officer and GM international, says that for fast-moving consumer goods, such as dishwashing tablets, people are increasingly willing to direct AI assistants to order and reorder products based on prompts.

The critical moment then becomes the prompt a consumer gives to AI. Will the customer direct AI to make the purchase based on brand loyalty, or give a more general direction that lets AI decide based on factors like price? “You’ve got to ensure as a brand that, at some point in the query, your consumer is sharing their loyalty preferences. Otherwise, AI is guiding the journey,” said Clinger.

Considering that push-pull tension, Clinger says that companies also need to be “making sure that these AI agents are recognising their brand and pulling them in”.

Aurora Sassone, head of communications APAC for Intuit, said the software company is changing its marketing strategy to meet this reality. With its accounting software, QuickBooks, her team is optimising for AI search engines. “We’ve thrown out the old rule book,” she said. “We’re focused on the clusters of questions people prompt, and feeding that through content, reviews and Reddit. In our latest AI visibility rankings, Intuit QuickBooks comes up first, ahead of Australia market incumbents.”

Gemma Lemieux, marketing director ANZ at LG, said that for large purchases such as televisions, most consumers still make the final decision in person. “Only about 15% of consumers buy online – they still go in-store at some point. But increasingly, they interrogate the brand before they arrive, weighing what AI tells them against word of mouth.”

Consumer loyalty reaches board level

LiveRamp’s Hoptman noted that the quality of customer relationships can no longer be considered purely a marketing issue: “It’s a board-level problem, understanding your customer and building upon that asset.”

“To build true loyalty, you have to really understand that customer – across transaction, behaviour, convenience, brand advocacy, all the way through. The more you understand about your customer, the greater chances you have to create stickiness across those layers.”

The leaders at the roundtable agreed that true loyalty is evidence that a relationship has been consistently well managed, with Michael Levine, head of APAC, Uber Advertising adding, “Loyalty is not dead, but it has evolved beyond point-collecting. The new currency of consumer relationships is realised utility – cash savings and elevated service, delivered in a high-intent moment.”

The fundamentals clearly remain: understanding the customer’s wants and needs, keeping promises, and accountability and human connection when things go wrong. The group discussed how, as AI smooths so much of daily life, consumers are becoming less tolerant of moments that go wrong. A failure that would once have been shrugged off now stands out as a point of friction. Data collaboration can help here. For example, Hoptman noted, “Those frustrated signals before a client turns – how are we tracking that? What does that look like?”

Danielle Jenkinson, group chief growth officer at Metcash, said the “single most important insight we can take from all our data is understanding why someone off-boards. That’s where you find the real drivers – what people connect with, and where they have their most disappointing moments.”

Evolution versus revolution

The leaders agreed that the decisive experience is rarely the polished front end of the journey, but the response when something breaks. Louise Cummins of the Australian Centre for AI in Marketing said, “The question isn’t whether AI can replace the human interaction. It’s whether it should. The brands that get this right will use AI to remove friction and augment people, while understanding the moments where customers still want empathy, judgement and a human connection.”

Clinger added: “Someone said to me recently, ‘Everything is changing. Everything is still fundamentally the same.’ It’s just how you are learning about it, how you are being efficient about it, that’s changing.

“So, as a brand, you have to think about how you evolve. I think it’s evolution versus revolution.”

While all industries are grappling with these evolutions in consumer behaviour and marketing, Elaine Herlihy, Betashares chief marketing officer, said the “real test of loyalty is simple”.

“Knowing everything I know now, would I buy from you again? If you wouldn’t, that’s not loyalty.”

Visit https://liveramp.com/au/resources/if-loyalty-dead-what-replaces-it-eb-registration to download a copy of the LiveRamp whitepaper.

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