Our recent research of over 1,800 U.S. consumers, How Consumers Think About Value, reveals several unique findings on how consumers weigh price against experience, product quality, and other factors in making purchase decisions for brands like retailers, restaurants, hotels, and airlines.

Does price sensitivity mean brands should focus on being the cheapest?

Consumers choose many brands because they have the lowest prices. This can vary by industry, with retail and airline customers more commonly picking the cheapest option (60% and 59% of most recent cases, respectively) than hotel and restaurant customers (43% and 41%, respectively).  

However, there鈥檚 plenty of good news for brands that anchor their competitiveness on quality and experience over price. More than half of consumers are inclined to pay more for a better experience. This reveals that differentiation based on premium attributes like high-quality service and superior products can drive many brands to success, even if competitors win on cost.

Even in the face of inflation over the past few years, the “consumer surplus” (what consumers are required to pay versus the dollar value they put on what they receive) is still alive and well. For many industries, over two out of three consumers would have paid more than they did on their most recent transaction if the price was higher rather than abandoning the purchase altogether. This helps explain why consumer purchase frequency did not drop as much as many expected, even as prices rose dramatically.

However, consumers being willing to pay more doesn’t automatically give brands permission to raise prices and expect volume to stay where it is. Consumers can still turn to competitors with lower prices (and get even more surplus value) when products / services are undifferentiated. 

This should force brands to think hard about the quality of experience that justifies the price being where it is. It also means we need markets in which brands can’t collude to raise prices in concert and hurt the consumer, who is left without other options.

Just like industries differ in how often consumers choose the cheapest option, not all industries are equal in their willingness to pay more if needed. When a consumer transacts with one industry, it may more often be a “need to have” than a “nice to have” compared to other industries. That further underscores the need for brands to have the right data to know why consumers choose them and how fragile that choice might be.

Considerations for the retail industry

Drivers of choice for one retailer over another may be very price-dependent, even more than drivers of choice in other industries. 

However, retailers would be missing a critical element of consumer behavior if they didn鈥檛 recognize the 鈥渟hift to convenience鈥� that drives consumers to consider price in the context of many other convenience attributes 鈥� like location, variety, channels, return policies, payment methods, and many others. 

When taken together, these can easily outweigh the attractiveness of low prices, even if each nuanced component of convenience doesn鈥檛 on its own. This explains why 40% of retail customers most recently chose an option that wasn鈥檛 the cheapest.

When shoppers seek better prices, what they are really doing is trying to drive more 鈥渟urplus鈥� for themselves. Remember that the difference between price and value is surplus, so by definition, a lower price drives a higher surplus. However, improved experiences via convenience and quality can drive that higher surplus, too. 

The fact that price is as strong a driver as it is also reveals how opportunities exist for some retailers to further differentiate themselves on attributes other than price 鈥� essentially zigging while others are zagging.

Measurement is critical alongside this finding, too. Every brand will index differently on the surplus drivers. Just like an 鈥渋mpact score鈥� helps brands understand which topics drive scores, analyzing the factors that best drive perceptions of a surplus between value and price can do wonders for helping a brand understand its positioning in the market and adjust if needed.

Considerations for the hospitality industry

The travel and hospitality industry offers a unique lens through which to observe consumer value. While price sensitivity is evident, with about half of travelers typically choosing the cheapest option for flights and accommodations, there’s a clear willingness to invest in experiences that enhance the overall journey. This demonstrates a desire to maximize not just monetary savings but also the experiential surplus derived from travel.

The Price-Conscious, Surplus-Seeking Traveler: The fact that a significant portion of travelers prioritize price underscores the importance of competitive pricing. However, it also presents an opportunity. By offering transparent and fair pricing, travel companies can build trust and attract price-sensitive customers, laying the foundation for a positive surplus perception.

Experiences that Justify the Premium: A large majority of travelers believe a better experience is worth paying more for. This directly translates to a higher perceived value and, consequently, a greater consumer surplus. For example, a one-of-a-kind boutique hotel that offers personalized service, unique local experiences, and a curated ambiance can command a higher price point because it delivers a richer, more memorable experience.

Bundling for Value: Consumers are drawn to bundled offers, perceiving them as a way to unlock greater value. For instance, a resort that packages accommodation with meals, spa treatments, and airport transfers creates a more compelling proposition than one that offers a low base rate but charges extra for each amenity. We鈥檝e found this bundling strategy can increase the perceived surplus by offering a comprehensive experience at a perceived discount.

Loyalty Programs Cultivating Long-Term Surplus: Loyalty programs are powerful tools for fostering long-term customer relationships and enhancing the perception of value. Airlines that offer frequent flyer miles, upgrades, and lounge access to their loyal members essentially provide an ongoing surplus that keeps customers returning. While building true loyalty with customers requires more than points and miles, loyalty programs drive engagement and increased opportunities to build true emotional loyalty.

Transparency as a Trust Builder: Deceptive pricing practices erode trust and diminish perceived value. This issue has been well-publicized in the industry, and experience data proves they are short-sighted. A customer鈥檚 trust will take a significant hit if they are surprised with a charge of $30 a night for bottled water upon request, wifi they can get free at any coffee shop and a small fitness center they don鈥檛 have time to use. Travel companies that are upfront about their fees avoid hidden costs, and truly offer amenities of value are more likely to be seen as offering a fair deal, which contributes to a positive consumer surplus.

Navigating today鈥檚 economic landscape

A brand鈥檚 sustained success lies in recognizing and responding to the diverse needs and preferences of consumers, balancing price with positive experiences to foster loyalty and drive growth. By focusing on elements such as convenience, superior service, and unique offerings, brands can ensure they remain competitive in an evolving market. 

For more insights into 糖心原创 Market Research, meet the team at Experience! 糖心原创 Experience 2025 is taking place in Las Vegas, NV, March 24 鈥� 26, 2025.

Wondering what makes a customer loyal, how loyal customers are across industries, and how to gain loyal customers? My colleagues and I had the chance to answer these questions and more as part of our new customer loyalty research study conducted by 糖心原创 Market Research. The findings are available in our new report: Redefining Customer Loyalty.

The customer loyalty statistics shared here are based on an April 2022 analysis of the following: 糖心原创鈥檚 credit/debit transaction panel for behavioral metrics, tracking the activity of over 5 million opted-in consumers within the airline, hotel, restaurant, and retail industries, combined with a separate survey panel for attitudinal data with a sample size of 2,022 general population restaurant and retail customers, 1,650 general population hotel and airline customers, and 1,474 pre-Covid hotel and airline business travelers.

What Makes a Customer Loyal to an Airline, Hotel, Restaurant, or Retail Brand?

When our team asked survey participants to share the top reasons they feel loyalty toward a particular brand, consumers consistently cited that one of the main factors is that the company is the first to come to mind when they think of a given product or service category. This was the #1 reason cited by retail customers, the #2 reason for hotel customers, #3 for restaurant and airline customers, and #1 overall for customers across industries. 

Based on the survey responses we received, we found that the other top drivers of customer loyalty include:

• Product quality:聽This is the #1 factor that influences restaurant and retailer customer loyalty
• Loyalty program membership enrollment:聽Hotel and airline customers say this is their #1 driver of loyalty
• How often the customer purchases from the brand:聽Being a frequent purchaser is the #2 reason restaurant and retail customers say they feel loyal to a brand and the #4 and #6 reason hotel and airline customers say they feel loyal to a brand, respectively

In fact, consumers say these factors influence their customer loyalty more than when brands support causes they care about (the #13 factor that drives customer loyalty across industries, according to our research), when a brand is one that their friends or family prefer (#9), or when customers have a personal relationship with the brand鈥檚 staff or owner (#12).

How Can Brands Increase Customer Loyalty?

Based on the survey responses we received, we see that brands that want to increase customer loyalty should prioritize strategies that place their brand top-of-mind for their customers over the competition, such as by investing in .

Within the airline and hotel verticals specifically, we see that consumers associate the idea of 鈥渓oyalty鈥� with brand鈥檚 loyalty rewards program, citing being a member of the company鈥檚 rewards program as their #1 reason for feeling loyal to a brand. This is true to a lesser degree for retail customers as well, who cite this as their #3 reason for feeling loyal. There鈥檚 not as strong a link for restaurant customers, who cite this as their #7 choice among the top factors that drive their brand loyalty.

When our researchers asked our study participants what a brand could have done differently to make them more loyal, they said brands could lower their prices and offer better value for the money 鈥� choices that ranked in the top three responses across airline, hotel, restaurant, and retail customers.

What鈥檚 the Best Way for Brands to Measure Customer Loyalty?

Brands typically measure customer loyalty by looking at data from their own internal systems, tracking things like purchase frequency, lifetime value, NPS庐 survey responses, and engagement. While these measures can reveal how different segments are performing 鈥� pinpointing active customers versus inactive ones and promoters versus detractors 鈥� this limits insights to interactions between consumers and a given brand, and fails to provide any competitive context on that consumer鈥檚 behavior with a given product category as a whole.

For instance, your customers might engage with your brand frequently, but that could simply be a reflection of the fact that they engage with your industry frequently as well. With the added layer of external insights, you would be able to see if your customers are actually interacting with your competitors at a higher frequency 鈥� something your internal data won鈥檛 reveal.

That鈥檚 why 糖心原创 Market Research approaches things differently. We measure customer loyalty by tracking consumer panelist activity within the entire market. That way, all of the market activity of a given consumer is considered 鈥� such as dollars spent or number of trips to both you and your competitors 鈥� to determine what market share of loyalty your brand is earning.

Measuring customer loyalty in this way helps differentiate which customers truly are demonstrating loyalty by spending a high proportion of their total in a given category to one brand over the competition. If you want to detect competitive threats and opportunities for improvement in your category, be sure to benchmark your customers鈥� share of spend against your competitor鈥檚 customers鈥� share of spend.

Which Industry Has the Most Loyal Customers?

As part of our research into customer loyalty, we wanted to find out which industry has the most loyal customers within the airline, hotel, restaurant, and retail industries. Our team looked at how many customers are represented in each industry, how frequently they make purchases, and how many brands they make purchases with within a given vertical.

Based on our analysis, we found out that airlines, followed closely by hotels, have the biggest share of loyal customers, compared to restaurants and retailers.

It is true that fewer people in the population are customers of airlines and hotels and that these consumers complete transactions with these brands less often than the customers of restaurants and retailers do. As a result, a given consumer may spread out their activity across a smaller number of airlines or hotels than they would within the restaurant and retail industries, and will appear more 鈥渓oyal鈥� to the airline or hotel they use most often. However, airline and hotel brands see a more loyal average customer even when controlling for this.

Redefining Customer Loyalty

Customer loyalty is a critical driver of success for brands. If you want to make the most out of your investments in customer loyalty, be sure to check out our full Redefining Customer Loyalty report.

You鈥檒l learn how the customer loyalty landscape is evolving, get the latest insights on what鈥檚 shaping customer loyalty today, and unlock new ideas for adapting your customer loyalty strategies to gain a competitive advantage within your industry as our researchers reveal how the pandemic has affected customer loyalty, whether customer rewards programs really help improve loyalty, how consumers feel about brand loyalty programs, and what features customers want to see in customer loyalty programs.

The hospitality and travel industry鈥檚 recovery is on many people鈥檚 minds as vaccines continue to roll out and the end of the pandemic is in sight in some parts of the world. As guests begin to return, their behaviors have changed. That means guest feedback and engagement have become more crucial for hoteliers as they head into the next normal.

Why is guest feedback important? Not only does it provide a window into guest satisfaction, but it offers a way to adapt your operations to better serve customer preferences and needs. It also allows you to gain insight into ways you can聽innovate to stay ahead of the competition.

But, just collecting customer feedback is not enough. As hoteliers look for new ways to increase bookings, preferably direct, engaging with customers will be key to gaining guest loyalty. Recent , conducted in partnership with 糖心原创, shows that while engagement and interaction between hoteliers and guests are taking new forms, it is still as important as ever and a key driver for the insights that will lead to innovation that puts brands a step above the competition.

Here鈥檚 what the research shows as you embark on how to create a聽customer engagement strategy聽that works for you.

How customer engagement boosts business

Engagement and interaction between hoteliers and guests are taking new forms but are still as important as ever, the research shows. Customer engagement is a key driver of guest satisfaction and loyalty 鈥� and can lead to a lift in direct bookings as a result.

According to the research, a customer鈥檚 willingness to share feedback, along with hotel management鈥檚 response, affected these four elements:

1. Future guest satisfaction: When hotel management acknowledged service shortcomings and offered personalized and detailed apologies, guest satisfaction improved on future stays.
2. Tendency to share reviews online: A quick thank you from the hotel after receiving feedback increased the likelihood that the guest would share a review online after their next stay. On the flip slip, researchers found that overly detailed thank you messages could deter guests from sharing future reviews.
3. Loyalty: Feedback provided by guests, whether it was positive or negative, signaled a willingness to engage with the hotel brand. It increased the chance of the guest becoming loyal by almost 50%. The likelihood of becoming loyal increased even more when management responded to guest feedback.
4. Booking channel: When customers engaged with the brand via a guest satisfaction survey, they were less likely to book via a third party and instead book direct. As a result, hotels that engaged with guests reduced OTA commissions by 5% 鈥� savings that were further increased when managers responded to guest feedback.

3 tips for engaging with customers

Engaging with customers can help to grow advocates for your brand when current customers are more willing to share their experiences via reviews for prospective customers to see. Here are three ways you can set yourself up for success.

1. Solicit feedback: Let your customers know that you want their opinions. Request feedback via guest surveys and encourage your customers to share their experiences online.
2. Show you鈥檙e listening: Customers will know your brand is open to listening to them when they see you respond to reviews. Make sure you offer personalized and relevant responses to demonstrate you are actually reading the feedback.
3. Act on feedback: Listening is great, but it doesn鈥檛 mean much if you aren鈥檛 acting on what you learn. Your guests are telling you what they need for a stellar customer experience. Listen, learn, then act to stay ahead of competition and gain loyalty.

The research found that consumers new to providing reviews online are disproportionately negative. If you rely on customers to be self-motivated to post reviews, you could be left with a biased view of satisfaction that tends to be less positive. You need to facilitate and make it easy for your customers to share their feedback if you hope to get a clear picture of guest satisfaction.