Raising the Bar on Customer Experience Drives Brand Engagement and Customer Loyalty
May 29, 2012 § Leave a comment
Is Engagement the Best Way to Keep Customers?
According to a recent article titled Three Myths about What Customers Want by Karen Freeman, Patrick Spenner and Anna Bird on the HBR Blog Network — interacting as much as possible with customers and building relationships with them actually does very little to increase customer retention. In a study involving more than 7000 consumers, HBR found that companies often have dangerously wrong ideas about how best to engage with customers and cites three common myths.
Myth #1: Most consumers want to have relationships with your brand.
Actually, only 23% of the consumers in HBR’s study said they have a relationship with a brand. In the typical consumer’s view of the world, relationships are reserved for friends, family and colleagues. (What consumers really want when they interact with brands online is to get discounts).
Myth #2: Interactions build relationships.
Shared values build relationships, not frequent interactions. A shared value is a belief that both the brand and consumer have about a brand’s higher purpose or broad philosophy. For example, Pedigree Dog Food’s shared value is a belief that every dog deserves a loving home. Southwest Airlines’ shared value revolves around the democratization of air travel. Of the consumers in HBR’s study who said they have a brand relationship, 64% cited shared values as the primary reason and only 13% cited frequent interactions with the brand as a reason for having a relationship.
Myth #3: The more interaction the better.
According to HBR, there’s no correlation between interactions with a customer and the likelihood that he or she will buy, buy again or recommend your brand. Yet, most marketers behave as if there is a continuous linear relationship between the number of interactions and share of wallet. Without realizing it, many marketers are only adding to the information bombardment consumers feel as they shop a category, and are actually reducing stickiness, not enhancing it.
Based on HBR’s findings, the authors suggest three different strategies for marketers to improve their effectiveness:
- Understand which of your consumers are in the 23% who have a relationship with your brand and which are in the 77% who don’t. Apply different expectations to each group and market differently to them. Stop bombarding consumers who don’t want a relationship with your attempts to build one through endless emails or complex loyalty programs. Those efforts will be low ROI. Chances are there are higher returns to be had elsewhere in your marketing mix.
- Communicate your brand’s philosophy or higher purpose. Patagonia’s commitment to the environment and Harley Davidson’s goal “to fulfill dreams through the experience of motorcycling” are excellent examples of brands that have a demonstrable higher purpose built into their missions. These offer a credible basis for shared values and relationship-building.
- Instead of relentlessly demanding more consumer attention, treat the attention you do win as precious. Then ask yourself a simple question of any new marketing efforts: is this campaign/email/microsite/print ad/etc. going to cut the cognitive overload consumers feel as they shop my category? If the answer is “no” or “not sure,” go back to the drawing board.
When it comes to interacting with your customers, I agree that more isn’t better. But, I would argue that the QUALITY of the customer experience is an important determining factor that should be added to this list.
Various studies by Forrester and others have shown that marketers are still falling short at customizing experiences for each of the unique media channels and technologies (e.g., websites, mobile sites and apps, and social media) being used today to engage customers with their brands. Use of best practices for optimizing the user experience and creative ways that help potential buyers discover your brand’s unique benefits provides a practical strategy to differentiate your brand and increases brand stickiness (the likelihood that consumers will buy, repurchase and recommend your brands to others).
Creative examples include:
- Providing timely digital information via smartphone apps, such as augmented reality, personalized merchandising, product store information (e.g., hours and directions), user manuals, price comparison information, in-store product availability, expert reviews, real-time coupons, in-store navigation and checkout
- Using of video, rich brand/product content and consumer-generated content (such as reviews and ratings)
- Capitalizing on cross-channel branded content opportunities that showcase your brand’s personality using technologies, such as augmented reality, image recognition, near field communications (NFC) and QR codes
Bottom line: Raising the bar on the quality of customer experiences and finding unique ways that make it easier and more enjoyable for buyers to discover, learn and buy your brand drives engagement and abiding customer loyalty.
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Brand Differentiation is the Starting Point for Driving Profitable Long-term Growth
May 8, 2012 § Leave a comment
Without a differentiated brand positioning, organizations face commoditization, and it becomes exceedingly challenging to win new customers except when competing on price.
Quad/Graphics’ third annual Special Interest Publishers Survey revealed many key insights about publishers’ pain points, needs and strategic priorities. While the findings were unique to magazine publishing, they were consistent with recent studies conducted with C-level executives in other industries, such as the retail trade, consumer packaged goods, insurance/financial/education/healthcare services and associations/not-for-profit. They all center on a singular strategic imperative: to drive profitable long-term growth.
At the end of the day, the ability to successfully carry out this mission is largely dependent on an organization’s performance in three critical areas referred to in my earlier posts as the “Three Pillars of Marketing”:
- Brand Development – driving profitable growth through a brand positioning that is unique from market alternatives and relevant to customer needs;
- Market Development – driving acquisition of profitable new customer targets to grow market share and expand into new markets; and
- Customer Development – retaining and maximizing the value of existing customers while reducing marketing investment and costs to serve them.
Developing a differentiated brand positioning is the first step. This is the foundation that drives everything that happens in the remaining two pillars. Without it, organizations face commoditization, and it becomes exceedingly challenging to win new customers except when competing on price.
Unfortunately, when growth stalls branding is often overlooked in favor of short-term tactics, such as price-cutting or promotions designed to boost sales. But the real issues – lack of differentiation and relevance as customers’ needs change – often fail to be acknowledged and appropriately addressed.
One reason busy executives tend to overlook branding as a strategic business tool is that the concept of brand is misunderstood. They think of a brand simply as a logo, tagline or ad campaign. They fail to understand its deeper meaning and that branding is a multistep journey: the one tool in their tool chest that can have the greatest impact on growing the long-term profitability and asset value of their business.
For many organizations, brand equity is the most valuable asset that appears on the balance sheet. And strategic branding lays the foundation for increasing the return on your overall marketing dollar investment and other closely related benefits, such as category leadership, reduced vulnerability to competition, the ability to charge premium prices and quicker acceptance of new products and services.
Brand Perspectives 