The future of brand loyalty: new age, new rules?
Last week, I had the pleasure to participate in a panel discussion on the future of brand loyalty, hosted by UK’s Wine and Spirits Trade Association (WSTA). Over 170 guests turned up to take part in a great conference labeled Loyalty and how to inspire it. Alex Forrest, journalist and former political correspondent at ITV News (ITN), moderated a lively debate on the future of brand loyalty with Jon Forsyth, founder of advertising agency adam&eveDDB, Sam Linter, wine maker and MD of English winery The Bolney Estate, Karen Jones CBE, hospitality heavyweight and founder of Café Rouge and myself.
In today’s crowded, fast-paced and hyper-competitive market place, all panel members agreed to the fact that it is harder to get consumers to remain loyal to your brand. Here are my takeaways to take consumer loyalty to the next level.
Tweetaway: 8 lessons on #brandloyalty from @wstauk #wstaAC http://insit.es/1KGMvNV by @kristofdewulf #mrx #marketing #branding #wine #spirits
1. If you want loyalty, buy a dog
In a recent study, the WSTA found that UK wine drinkers regularly change brands and have little or no brand loyalty. According to Havas Media Group Meaningful Brands, the majority of people worldwide would not care much if 73% of brands disappeared tomorrow. Brand loyalty is indeed under increased pressure with consumers being able to choose from a wealth of competitive options that are increasingly easier to access in a multi-channel context. In line with Byron Sharp’s thinking, outlined in his book How Brands Grow, don’t just assume brand loyalty exists and always take a brand repertoire reasoning, independent of how successful your brand currently is.
2. Take your brand purpose seriously
Though it might sound paradoxical, in a world that is changing ever faster, there is an increasing need for consistency. Since its launch in 1987, Red Bull does an amazing job staying true to its purpose to give people wings, yet finding new creative ways to get this message across. Their approach is in sharp contrast to a competitive soft drinks brand like Pepsi that has used more than 25 taglines in brand communication in the United States only between 1987 and now. If you are not clear about what you are and why you are here, there is no reason why consumers should engage with your brand. Karen Jones sits on the board at online fashion retailer Asos.com and believes it is important that you can sum up your brand in one sentence. “Asos is: global fashion wardrobe for 20-somethings,” she says.
3. Create a human touch in an ever digitized world
In an ever digitalized world, there is increasingly less room for all things analog. Glued to our digital devices, we now spend more time on our smartphones than with our partner. With real human contact getting scarcer, it is also becoming more valuable. As spending time with each other has become harder to come by, we attach more value to anything perishable: people looking at us, talking to us, understanding us and moving us. Make sure your brand manages to create that emotional, human connection. Think about re-inventing your brand-tracking KPIs, moving away from brand-centric ones such as brand consideration and evolving towards consumer-centric ones like brand identification.
4. Think outside of your generational thinking box
In a recent InSites Consulting global research project (in cooperation with GMI) we talked to Baby Boomers, Gen X, Gen Y and Gen Z consumers, taking a closer look at what differentiates the new consumer generations in today’s market from the previous ones. The study highlighted that it is dangerous to take your own generational perspective at things, but also that generational behavior can be very counter-intuitive. For example, did you know that the youngest generation, Gen Z, the demographic group comprising people born after 1995, attaches far less importance to sustainability than the Baby Boomers? And that they are more into luxury goods and brands? When it comes to the 20-somethings, the panel agreed: it’s all about me, with brand personalization as an important vehicle to drive emotional connection.
5. Get a deeper understanding through collaboration
When it comes to finding out what consumers think, tapping into conversations on social media has never been this easy. But it takes more than merely listening in order to understand the deeper layers of consumer behavior and needs. Clever brands lift upon consumers’ desire, enthusiasm and ability to collaborate with brands and create the necessary conditions for co-design, co-creation and co-ownership. Ducati, the famous Italian designer and manufacturer of sporting motorcycles, quickly understood the importance of building bridges between their customers and employees. Since about 10 years, the company collaborates with Ducati owners, prospective owners and brand fans, using its Ducatisti communities. The communities help Ducati establish a closer contact with customers, so as to better understand their changing needs and to co-create solutions for the future.
6. Don’t consider loyalty as the Holy Grail
While brand loyalty is an important indicator of brand health, make sure you don’t zoom in too much on it. First, in a world where brand repertoire is the norm, the concept of brand penetration has become increasingly important. Brands need to get their priorities straight, focusing on getting noticed and being remembered first before being able to reap the benefits of brand loyalty. Second, brands need to understand that brand loyalty goes beyond transactional loyalty. With nearly 3 billion brand conversations taking place around the world every day, consumers have become a highly powerful global marketing machine themselves, either boosting or working against the effects of traditional brand advertising. So think about conversational loyalty as a different way of looking at brand loyalty.
7. Be real, whatever happens
In an increasingly open world, there is no place for brands to hide. The ones that still do, will soon cease to exist. Companies are becoming increasingly naked by the day, either unintentionally (with whistle-blowers leaking information that has been kept a secret) or intentionally (with values and integrity as an integral part of their business models). Jon Forsyth stressed the importance of being authentic by sharing his work on Haig Club, merging an existing whisky brand with global mega brand David Beckham. Part of the success is that Beckham is an investor and, hence, became part of the business. From a consumer’s point of view, it made it authentic.
8. Question your product or service
Brand loyalty is not only about the consumer, it is also about being critical about your own passion for the brand and about questioning the performance of your product or service. What makes your brand so special, in what way is it different from competitive offerings, why is that? By going back to the seemingly less important details that make up the complete experience around your product or service, you are installing the necessary passion and pride that form the ultimate basis for brand loyalty. If brands want to remain successful, they need to move from being focused to becoming obsessed with their everyday performance and experiences.
Thanks again for having me WSTA; looking forward to welcoming your ideas on building and sustaining brand loyalty!
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