For brands today, the biggest challenge is not about building loyalty in a sea of point-based programmes and purse-clogging plastic. It is remaining relevant in the face of changing values and increased consumer expectations.
Consensus suggests brand loyalty is broken. Despite providing the opportunity to deliver competitive advantage, all too often loyalty programmes have become a drain on resource rather than the value-add they were designed to be. Instead, in an era of mobile-enabled consumerism, people are increasingly purchasing because of a brand’s relevance to their needs in that moment. When done right, personalisation can drive significant business growth. Recent research found that personalisation can deliver up to eight times the ROI on marketing spend. Clearly, it’s a worthwhile investment for brands to reconnect with their consumers.
he modern consumer expects brands to provide a valuable experience and understand them as an individual. Brands earn relevance when all elements of the customer journey align with the interests and passion of the consumer. Every marketing touchpoint– from branded content and paid media to influencer selection – must align with consumers’ ever-changing interests. Pyscle, a premium fitness brand heralded for re-writing the rules of exercise has successfully created a worldwide community for indoor cyclers, aligning with consumer values of health and a positive environment. It is an ecosystem of dynamic living experiences, extending beyond a fitness studio to a lifestyle brand adored by millions.
A new way to win with consumers
Creating a relevant brand starts with building emotional bonds. Brands must find a strategic purpose that creates shared value. Recent studies have found that brands with a strong sense of purpose grow at a rate twice that of those who don’t. For Pyscle, this was harnessing the transformative power of movement to help empower everyone, everywhere ‘to own their life’s beat.’
Brands who are successful at building these emotional connections don’t just transact with consumers; they deliver an intangible element that becomes part of an ongoing and meaningful relationship. For Nike, it was moving away from the billion-dollar advertising campaigns and legendary athlete sponsorship to the inception of the Nike+, an ever-expanding lifestyle community that motivates members to be more active. The platform illustrates Nike’s commitment to finding new ways to delight and deliver for consumers, through an expanding network of expert coaching from Nike pros, to valuable partnerships with Apple, Headspace and ClassPass.
Create, innovate and engage
To truly succeed, organisations must be willing to adapt. As consumer expectations shift, brands need to be open to engaging customers in the most relevant way, as those who are too slow to transform will lose their relevance. Managing the customer experience by creating emotional connections, not simply meeting functional needs will enhance their abilities to engage with consumers in the most relevant ways. In addition, as their habits and needs change, consumers will be drawn towards brands that adapt along with them.
Finding the right balance
Relevance is the key to building loyalty with consumers, and the availability of data has led to a new wave of personalisation. Data can help brands provide the most relevant message to the right consumer at the most appropriate time. However, it is important that they strike the right balance between delivering relevant personalised experiences and maintaining consumer trust. There is a growing body of evidence to suggest concern by consumers about how brands use their data for personalisation. That said, consumers are more likely to share their personal information if they can trust brands to protect this data.
Transparency is also important in building trust. Consumers would feel more comfortable sharing their personal information if brands proactively told them how it would be used. Interestingly, an overwhelming 80% of consumers expect companies to ensure transparency in treatment and use of data collected. This would suggest discomfort from consumer populations where brands are found to be using information purchased by third parties for personalisation efforts.
Today’s demanding consumers are continuously analysing and assessing their purchasing decisions. Traditional brands that rely on loyalty programmes and large-spend advertising campaigns are being side-lined by consumers in favour of ‘movement brands’. ‘Movement brands’ intercept consumers in their purchasing journey using relevance and experiences instead of the product alone. Brands like Psycle illustrate consumer willingness to buy from those most relevant to them in the moment – even if this is at a premium. Consumers will remember their experience with a brand long after they received a discount. These brands have a meaningful role in consumers lives, and one which they need to compete for every single day. Relevant brands are learning continuously; it’s ultimately what helps them stay relevant, find new customers and continually reinvent themselves for the future.
Raina is a senior consultant within the Customer Engagement practice. She is passionate about brand strategy, engagement and embracing digitalisation to improve market position and performance.