Turnover 2026 is growing but profits falling. Why?

There is a huge gap between how businesses assess loyalty and how customers feel about it. Customers primarily value attitude, convenience, and predictability. And they can be ‘loyal’ after just one purchase. Research by Medallia and Ipsos shows that 52% of buyers are ready to return after their first order (‘first interaction’). A convenient website, expectations that match reality, normal delivery, clear communication - the customer is satisfied with everything.

But for businesses, a ‘loyal customer’ is often someone who has placed several orders, signed up for a special programme, responds to mailings, and ‘sticks’ with the brand. This is where companies make a key mistake - they start offering discounts to those who are already willing to buy again at full price.

The business tries to ‘buy’ loyalty where it already exists. The store devalues its own goods by spending its margin on unnecessary marketing and loses up to 10% of its potential regular audience.

The mathematics of pricing proves that dumping is the most expensive way to retain customers. What is a 5% discount for a small business? In order not to go into the red and ‘cover’ it, you need to compensate for the loss of margin and simply maintain your current profit. And to do that, you have to do the impossible — increase sales by 18%. Such price elasticity is practically unheard of in real e-commerce markets.

In the price structure of a typical company from the Global 1200 list, about 90% is made up of variable (66%) and fixed (24–25%) costs. Net profit in the price is less than 10%. In such conditions, a price increase of just 1% can increase profits by 10–11%, while a sales volume increase of the same percentage yields only 3–4% profit.

Lowering prices means a double burden on the business with the same financial results. It is more effective to monetise trust than to sacrifice margins.

Customers are much more patient than sellers expect. A delivery delay or an error in order fulfilment rarely becomes a point of no return on its own. Research shows that customers do not leave after a single mistake, but after a series of negative events, especially if there has been no adequate response from the brand or store. Moreover, the decision to leave is usually not related to price.

This is where businesses often draw the wrong conclusion: they try to ‘buy’ loyalty with a discount. In reality, the customer cares more about the seller's response and attitude towards the problem.

A discount does not fix a systemic failure or restore trust. A mistake is perceived as an experience, while ignoring it is perceived as a trigger that causes the customer to leave.

Loyalty cannot be bought with discounts. It is formed from experience and evaluation: quality of service, timing, prices, and predictability in the store's operations. It is these impressions and memories, rather than discounts and one-off promotions, that form the habit of returning.

One of the most underrated retention factors is feedback: a short dialogue in a messenger after delivery, a quick response to negativity, a personalised response instead of a template - this is often enough to make the customer feel that they have been heard. And loyalty to a store is formed through positive experiences: about 80% of buyers choose brands where the purchase goes smoothly, and only 70% are guided by low prices.

TONOP experts insist that investing in service and feedback is cheaper and works longer than direct discounts.

The definition of loyalty has changed. Previously, businesses only looked at transactions. Today, it is important to track customer engagement and recommendations (mindset) alongside transactions.

Not only the frequency of orders is measured, but also advocacy — the customer's willingness to defend and recommend the store. The concept of identity (emotional connection) has emerged, which characterises how the customer relates to the values of the selling company. Loyalty reduces price sensitivity. The buyer continues to compare, but price is no longer the only and decisive argument.

TON OP doo ltd helps customers systematise their customer bases, diagnoses the state of the target audience, and analyses the reasons for customer churn. TONOP algorithms analyse transactions and help build a marketing strategy based on real customer engagement, rather than random clicks.

The TONOP programme helps synchronise data for CRM collaboration with other systems. Automatic lead scoring reduces the time spent processing unpromising leads and increases the number of leads converted into sales.