13 September 2016

Why Loyalty Isn't The Finishing Line For The Consumer-Brand Relationship

Written by: Jessica de Boer, Account Director at Edelman

2016 Earned Brand Study

Why Loyalty Isn't The Finishing Line For The Consumer-Brand Relationship

Analysing research from 13,000 people across 13 different countries, the overarching key finding from the study was that there is a job to be done in converting loyalty to advocacy if brands want to encourage consumers to buy, advocate and ultimately defend.

Here are four key takeaways:

Current Australian brand relationships are ‘involved’

The findings locally found that Aussies feel ‘Involved’ with their favourite brands, scoring 32 out of 100 in the Brand Index (globally the Brand Index is 38). So what does this mean? Well, ‘involved’ isn’t necessarily a bad thing and in fact, it’s what we used to think of as brand loyalty. However, with disruption in the marketplace, an involved relationship may no longer be enough and brands risk losing their customer base. The gap between expectations of what consumers want with their brands and what they currently deliver shows us that there is considerable opportunity for brands to move towards committed relationships.

Caption: We asked consumers to evaluate their relationship with their favourite brand across the following relationship dimensions; Builds trust at every touch point; Makes its mark; Invites sharing, inspires partnership; Tells a memorable story; Acts with purpose; Embodies unique character; and Listens openly, responds selectively. Through the study, the respondents created scores per dimension to end up with a score out of 100 to form the Brand Index.

Caption: We asked consumers to evaluate their relationship with their favourite brand across the following relationship dimensions; Builds trust at every touch point; Makes its mark; Invites sharing, inspires partnership; Tells a memorable story; Acts with purpose; Embodies unique character; and Listens openly, responds selectively. Through the study, the respondents created scores per dimension to end up with a score out of 100 to form the Brand Index.

Committed relationships drive loyalty, purchase, advocacy, defence and price premiums

The findings showed that the more committed to a brand a consumer was, the more likely consumers are to try a new product, pay a premium, stick up for you if competitors are getting better reviews or even defend you if something goes wrong for the brand. This demonstrates that when moving the needle from Involved to Invested or Committed, it is like gaining insurance for your brand reputation, placing you in a stronger position when other brands are trying to break up your relationship.

Caption: To determine if a committed relationship will actually lead to better sales, we looked at how consumers are likely to engage with brands at different relationship stages. The above shows the percentage at each relationship stage who are likely to engage in each behavior toward their favourite brand.

Caption: To determine if a committed relationship will actually lead to better sales, we looked at how consumers are likely to engage with brands at different relationship stages. The above shows the percentage at each relationship stage who are likely to engage in each behavior toward their favourite brand.

When it comes to channels you need to earn commitment but you also need to own it

Now we can see the benefits of commitment – what channels should you be employing to reach your customers and engage with them?

The key finding – paid channels gain interest, sure, it is after all a vital part of the marketing mix for brands to have ‘Involved’ relationships with their brands. However harnessing the power of Peer to Peer or ‘people like me’ to drive brand advocacy, as well as turning attention to owned media channels that tell a memorable story, are the two factors that can really impact consumer relationships.

Jean Christophe Demarta, Senior Vice President of Global Advertising at The New York Times, discussed the importance of not being complacent with owned channels which is one of the reasons the publisher created The New York Times Virtual Reality app which now provides a platform for brands to tell their story in a highly engaging and impactful way and ensures that a large and loyal brand relationship isn’t taken for granted

From a peer-to-peer perspective, An Le, Group Marketing Manager at Samsung Electronics touched on the brand disruption in the technology sector, recognising the vital business challenge to move consumers from loyalty to advocacy, particularly as it affects reputation and sales.

Caption: The results show brands require a sophisticated and multifaceted media mix depending on where you want your customer base to be. Early in the relationship, consumers engage the most with paid media as it works to get their attention. At the Interested stage, consumers use all three media at much the same level. However, what is interesting is that commitment requires substantial increases in peer and owned channels.

Caption: The results show brands require a sophisticated and multifaceted media mix depending on where you want your customer base to be. Early in the relationship, consumers engage the most with paid media as it works to get their attention. At the Interested stage, consumers use all three media at much the same level. However, what is interesting is that commitment requires substantial increases in peer and owned channels.

Purpose-based activity and telling a memorable story are the most impactful drivers

The brand index says that the two dimensions that will yield the biggest impact on building committed relations between brands and consumers are ‘acting with purpose’ and ‘telling a memorable story’.

A great example is Samsung’s ‘brainBAND’ campaign, which shone a light on the dangers of concussion. Here Samsung demonstrated that it is interested in being a force for good to help make the world a better place.
Persil/Omo is an example of a brand that ‘tells a memorable story’. The “Dirt is good” campaign is arguably one of the more notable modern-day brand stories. It weaves a new narrative of real significance into a category that traditionally would boast about the stains it could remove. Now, the narrative is that dirt equates to creativity. By establishing this story – one of true human significance that is applicable the world over – it propagates meaning, connection and, ultimately, commercial success.

Stevan Premutico, Founder & CEO, Dimmi Online Restaurant Reservations touched on the need for companies to start internally first, ensuring staff believe in the company values before looking to involve consumers on that journey.

So where to next?

Loyalty isn’t the end of the road for brands who want to keep their consumer relationship well beyond the honeymoon phase. Here are four key learnings for marketers to build a stronger relationship with their customers:

  • Inspire your consumers to get involved in something bigger than just your company or brand– like REI’s recent #OptOutside campaign – making sure the action is significant to reputation.
  • Communicate it well by channel. Use a mixture of paid, peer/earned and owned.
  • The biggest opportunity for brands to earn deeper relationships with consumers, lies in addressing the behaviours that scored the lowest on the Brand Relationship Index, namely ‘Acts with Purpose’ and ‘Tells a memorable story’ – so be sure your actions are based on listening and have purpose at the core.
  • Brands must answer consumers’ call by focusing on related strategies that entail collaboration, participation, shared values and shared actions.

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