40% of consumers in the UAE are increasingly inclined to explore other options for the best deals, leading to reduced brand loyalty.
Almost every UAE consumer will walk away from a brand after just one negative experience, according to a report released by ServiceNow (NYSE: NOW), a digital workflow company.
The new global survey of 18,000 consumers across 13 countries (including 1,000 in the UAE) also found the Gulf Cooperation Council (GCC) country’s shoppers to be the least loyal to brands. Some 85% of UAE consumers — 11 percentage points higher than the global average — said they are less loyal to brands than they were two years ago.
In a dive into the factors determining loyalty, ServiceNow found cost to be the biggest driver, with 40% of UAE consumers telling researchers that they are less willing to stay loyal to brands because they shop around for the cheapest option. In another finding, 73% of respondents reported spending more this year compared to 12 months ago and 54% of these higher spenders attributed their behavior to rising costs. Not surprisingly, when UAE consumers were asked what they would like to see brands prioritizing over the next 12 months, the top answer (42%) was price reductions.
Another driver of declining brand loyalty is that UAE consumers place a high premium on customer service. 91% said they were likely to switch brands following a poor customer experience and 23% of UAE consumers said they are less loyal to brands than they were 2 years ago because they have had disappointing experiences with companies.
“Brands in the UAE need to be at the top of their game,” said Ali Kaddoura, Country Manager – UAE at ServiceNow. “And while cost is important, brands must pay attention to other aspects that can set them apart from competitors who are just a click or swipe away from the modern consumer. Service must include exceptional streamlined experiences, both human and automated, at every touchpoint along the customer journey.”
The research also uncovered some very interesting insights as it relates to the role of AI in customer service. While most companies are racing to invest in more automated channels like chatbots, 77% of UAE consumers said they wouldn’t engage with a brand using AI, for at least some services, with 32% citing the lack of personalization and 20% saying they don’t trust the answer they will get.
The findings also showed a preference for human-to-human interaction among UAE consumers. 58% said they’d like to see all brands offer full 24/7 customer service and 52% said they’d like to see a return to human-based customer service to minimize automated routes, in the next year.
These findings are in stark contrast to employee sentiment on AI, which is overwhelmingly positive, based on a separate ServiceNow research study from just this past December. In that study, almost three-quarters (74%) of UAE employees — 26 percentage points higher than the EMEA average — saw AI as the biggest opportunity for the future of the workforce, especially due to its capacity to boost productivity.
“What we are seeing here is what advocates of responsible AI have been saying for some time – AI has the greatest potential as an augmenting force in business and a power enabler of human employees rather than a replacement for them,” Kaddoura noted. “When it comes to customer service, the survey results are clear: customers in the UAE and around the world may actually punish brands for perceived bad experiences. GenAI is the way forward and is at its best when empowering employees to build better relationships with customers by delivering human-based engagement sessions that delight and amaze them. It is a very human message and one we should all take to heart.”
