IN today’s marketplace we have learned that it is much faster paced than at any time in history. The consumer can switch his loyalties over a single bad report about a brand from one of his trusted sources, or one mistake can impact social media in a way that can truly damage a brand. Digital marketing spending is again on the rise anticipated to be growing by over 8 percent for major companies in 2015, but at the same time we need to understand clearly how we spend it to be sure we connect and build a better relationship with our consumers. This article by Glenn get’s right to the point and he brings up many of the issues that we have raised in our comments from the past. Today it is all about building lasting and meaningful relationships online with our consumers and it takes a great deal of patience and hard work to succeed at this.
Glenn Llopis, Contributor
Solving the leadership identity crisis to enable unseen opportunities
Consumers Are No Longer Brand Loyal
In today’s diverse new world of growing consumer demands, fueled by changing demographics and the cultural shift in the market, brands have some work to do to say the least. In the rush of business necessity and the desire to meet quarterly financial requirements from Wall Street, branding has become less about solving specific needs – and more an attempt to quickly create new revenue streams by promoting solutions for needs that don’t exist.
According to Armando Azarloza, President of The Axis Agency, “This is bound to fail because it doesn’t support lasting and meaningful engagement. It’s “moment marketing” – and it will not allow you to become part of your consumers’ reality and experiences.”
He continues: “Moment marketing does little to develop a brand or give consumers permission to interact with them. Brands must have purpose by producing goods and services that improve the lives of consumers and enhance quality of life. With today’s savvy consumer, it’s imperative that brands focus on how to better interact with them, how to build stronger relationships, and how to ensure that those relationships generate trust and meaningful engagement over time.”
Brands must begin to authentically engage with consumers who are not only becoming more diverse, but wiser about their purchasing habits and more mindful of living healthier lifestyles. Stimulated by sensationalism, social media trends and a generational force that is changing how brands earn loyalty and trust, consumers have become more critical and cynical.
“Brands earn trust by being authentic, and by being seen to be authentic,” says Robert Wolcott, Co-Founder & Executive Director of the Kellogg Innovation Network and a Clinical Professor of Entrepreneurship & Innovation at the Kellogg School of Management. “They earn loyalty by creating meaningful experiences across all contacts in ways that matter to customers.”
Brands like JCPenney, Sears, Blackberry, SPAM and Kodak that were once household names are today being challenged to survive, let alone compete. Innovators in their day, they became complacent and stopped defining trends, believing that their value proposition would withstand the test of time. But as today’s marketplace has taught us all, brands must be fully engaged and actively involved in allowing their brands to grow into relevant destinations for consumers looking to solve particular needs – these are the ones that will win market share and continue to grow.
Consumers are no longer brand loyal. They may be loyal to the engagement experience that a particular brand offers. Once the experiential elements of brand engagement disappear, in many cases, so does the emotional connection consumers have with the brand that was providing them that unique experience.
We live in an experience-driven world. Consumers gravitate toward those experiences that provide them with the stimulation they are looking for. People have become sensitive about how they spend their time and what inspires them to do so. If a brand focuses more on trying to sell consumers their products/services rather than finding ways to creatively engage with them and solve a need, their brand will be short-lived.
You don’t have to look much further than your own family to know that this is true. For example, my niece and her friend recently mentioned that they liked the Steve Madden brand – but if the clothes or shoes are not trending, they will quickly move-on to the brand that is. She was quick to point out that it was more about the dress that is trending than it was about the brand itself.
Consumers today are having difficulty trusting a brand’s intentions. They want to know what a brand stands for and what they value and they want that brand to live it every day – in everything they do and how they do it. If a brand stands for quality, a consumer expects it at all times. When brands begin to cut-corners, quality suffers and it is reflected in how a product tastes, smells, feels – and this is when the consumer begins to feel slighted.
This is also the case when brands lead you to believe that they must raise their prices due to industry-wide increases in cost of doing business. For example, over the past several years, many have grown frustrated with the airline industry and all of the incremental costs associated with travel, such as baggage fees, ticket change fees, etc. If people are loyal to an airline brand, it’s only because of the frequent flyer miles they’ve accumulated. Few airlines care to compete anymore with Southwest Airlines and what they stand for – delivering lower-cost, convenient, friendly service without adding baggage and other fees.
Brands are extensions of the lives we lead, and if the brand message, intention or engagement is not what is expected – loyalty goes away. Consumers are holding brands accountable to assure they are constantly adding value to their lives. If they don’t get what they expect, you will certainly hear about it on social media.
Consumers are paying attention to the manner in which brands communicate. They know when a brand is speaking at them instead of speaking to them. For example, the recent “Dress Normal” campaign by Gap did not speak to the millennial generation, who thought they were being told to conform and dress like everybody else. The ads failed to speak to them or they would have realized it was about individuality and dressing “normal” for you.
Oftentimes, brands miss the mark (however well-intentioned) and disrupt consumer loyalty because they take creative risks that are not in-tune with their consumers. This list of the worst ads in 2013 tells the story.
On the other hand, “When a brand is able to make an authentic connection with a consumer, something very powerful happens,” says Armando Azarloza. “You move from a moment – to a foundation for long-term engagement and loyalty. Brands should not be looking only to sell things in a moment; rather they should be exploring ways to build relationships, feed the connection, listen and become a voice that takes action on what you hear from your consumers.”
Given the evolution of the marketplace, brands risk disrupting consumer loyalty with advertising campaigns that may generate free advertising through viral awareness, but don’t communicate the particular benefits of the needs they are solving for. It’s a delicate balance and brands must walk a fine line to avoid social media and other negative backlash.
Robert Wolcott sees it in terms of authenticity and novelty. “Together, authenticity and novelty represent a paradox for brands in our world of accelerating change,” he says. “Consumers seek authenticity as well as novelty. How can you protect and promulgate the essence of your brand while simultaneously adapting to or better yet remaining ahead of tastes and trends?”
The brands that successfully find the right balance become empowerment platforms that shape how people live and guide the choices they make. Let’s face it, social media is where consumers share their voice, perspectives and attitudes about a brand, and those brands that engage through social media in meaningful and purposeful ways are the ones that will continue to grow. Consumers will commit to a brand that is willing to take calculated risks and commit to them.
Starbucks is one company that understands this and that is why they have loyal customers willing to pay a premium price for coffee – because of the innovation in their store environments, the promotional giveaways through the Starbucks app, the environmental-friendly standards by which they procure their coffee, and the new products and concepts they continuously introduce throughout the year, to name a few. Starbucks empowers their consumers by making them feel that there is an immediate return on their loyalty investment that comes right back to them. This is a lesson for the many brands that are only focused on the transaction – rather than cultivating a relationship that matters for the evolution of their brand.
Armando Azarloza sums it up thus: “There’s no secret why Starbucks and other companies like Nike have been successful. They have become part of the daily lives of their consumers. They share each other’s experiences and advance a movement. They aren’t positioning themselves, they are the position. And they live it every day through their products, social engagement and expressions of lifestyle.
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