Brands benefit from experience-focused consumers

There is a growing need to for brands to delight consumers if they are to cement customer loyalty, and this presents an opportunity for brand marketers to derive significant benefits from 'experience focused' customers, according to the annual Brand Keys Customer Loyalty Engagement Index (CLEI), conducted by New York-based brand loyalty and engagement consultancy Brand Keys.

The company's earlier announcement of what it calls the 'Decade of Delight' (which described consumers' key brand expectation in the 2011 CLEI) was supported by the study's findings in 2012, which discovered mounting evidence that it is indeed 'delight' that defines how consumers perceive and interact with brands.

Although there are rare exceptions, even the top-ranking brands' scores fell short of consumers' 'ideal standard', in part because consumers' expectation levels have been rising consistently. Across all categories, expectation levels for 'brand value' rose by 25% over the preceding 16 years, while brand-value rankings rose by only 7% (to 8%). However, it was attributes relating to 'experience' and 'brand values' that exerted the strongest impact on customer decision-making, category expectations, and engagement with brands.

The survey polled 49,000 US consumers aged 18-65, of which 75% were interviewed by telephone, 20% face-to-face, and the remaining 5% online. Assessments were based on a fusion of both rational and emotional aspects of category drivers, determining how well a brand met or even exceeded the 'ideal expectation' that consumers held for each particular category. Five new categories were added to the 2012 survey, bringing the CLEI assessments up to 83 categories and 598 brands. The new categories in the 2012 survey were:

1. Tablet computers, which include Apple, Samsung, and Amazon;
    
2. Video streaming websites, which include Hulu, YouTube, and Netflix;
    
3. Packaged coffee, which included Dunkin, Starbucks, and Green Mountain;
    
4. Packaged ice cream, which included Haagen Dazs, Ben & Jerry's, and Breyers;
    
5. Major league (online) gaming, which included Halo, Call of Duty, and Madden Football.

Top twenty 'most delightful' brands
While expectation levels for delight varied by category, the top twenty brands - which were perceived as being the best at creating customer delight - were as follows:

1. Apple (tablets)
2. Apple (smartphones)
3. Amazon (e-retailer)
4. Kindle (e-reader)
5. Facebook (social networks)
6. Hyundai (automotive)
7. Samsung (cellphones)
8. Discover (credit cards)
9. YouTube (video streaming)
10. Google (search engine)
11. Call of Duty (gaming)
12. Mary Kay (cosmetics)
13. McDonald's (quick-serve food)
14. Haagen Dazs (packaged ice cream)
15. Patron (tequila)
16. Grey Goose (vodka)
17. Crest Whitestrips (tooth whiteners)
18. Walgreen's (drug stores)
19. Clairol (hair colour)
20. AT&T (wireless phone service)

As Brand Keys observed in 2011, consumer expectations have been accelerating for some time, while many other industry observers have made the faulty assumption that pressures on price has meant that brands lost value. But quite the opposite is true, according to Brand Keys' president, Robert Passikoff: "Real brands are more valuable than ever. We need only look to the continuing success of luxury brands as evidence. Brands that lack meaning and differentiation are punished by the economic and behavioural shifts. Such brands have become 'category placeholders', a step closer to being a commodity. And of one thing you can be sure: consumers do not look for commodities in their search for delight."

Brands that received the highest loyalty and engagement assessments for 2012 and were seen to be delighting their customers better than their competitors included:

The CLEI data revealed forthcoming trends in the consumer marketplace. For example every category, when compared to the previous year, showed either a rise in importance or increased expectations when it comes to the brand-based attributes that most strongly affect the customer experience - that is, the things that generate delight.

Given the levels of commoditisation already witnessed in products and services, and in pricing and promotion strategies, it is perhaps no surprise that consumers are looking toward stronger brands for differentiation. Consumers know their brands, they know what they do, and they know what they're willing to pay for them. Satisfaction, it seems, is no longer the key driver of brand loyalty: it is a cost of entry into the market - a basic 'must have'.

Customer delight has become the new brand differentiator, and the brand experience is the key to earning a consumer's loyalty, whether it's built on the experience with products themselves, or how products are put into the hands of the consumer (from rapid delivery to product introductions), and even including the after-life of service and support that the consumer experiences after making their purchase. Consumers' rapidly growing desire for a delightful experience and authentic brand values are exerting a strong impact on customer decision-making and profitable engagement with brands, and those brands that are able to meet or exceed those expectations will become tomorrow's category leaders.