Nine key loyalty & engagement trends for 2009
Customer loyalty and engagement metrics make very effect leading indicators of what consumers think and, perhaps more importantly, how they are going to behave, according to Robert Passikoff of Brand Keys, who has identified what he believes will be the nine key consumer loyalty and engagement trends for 2009.
Passikoff's nine major consumer trends that are likely to have a direct impact on the success or failure of brand marketing efforts in 2009 are as follows:
- Price does matter, if you're selling a commodity With financial pressures and a lack of confidence in the economy, consumers are going to continue to be very conservative in their spending. An on-going psychographic trend Brand Keys has observed is that no matter how much consumers earn, and no matter how much discretionary income they have available, they still want to be perceived as "wise shoppers". In 2009 that title is bound to be more of an economic imperative than one having to do with fiscal self-image. This will be especially true given current economic indicators, all exacerbated by a decreased lack of trust in - and increased suspicions about - the old established financial and retail establishments. The precipitous decline in the economy will feed the ongoing trend of brands being unable to provide meaningful differentiation or resonating values, except, of course, those of low, lower, lowest prices.
- Differentiation, meaning, and added-values matter more Marketers will need to fight desperately with their research departments and advertising agencies to ensure that insights can be identified and communications configured to ensure that their brands actually stand for something significant in the mind of the consumer. Awareness as a meaningful market force has long been obsolete, and differentiation will be critical for success (i.e. sales and profitability).
Those who primarily rely on "flavour of the month" promotional tactics will quickly find that they are creating a lasting perception among their consumer base that only price (or price cuts) differentiates their products from the competition. Do that often enough and your product and service will move away from being a "brand" and will come to be regarded as a "category placeholder" and nothing more.
- Engagement is not a fad - it is the brand objective It has already been proved that real engagement correlates with positive consumer behaviour. Engagement should be defined by consumer response: it is the outcome of any marketing or media initiative that substantively improves a brand's equity (the degree to which a brand is seen to meet - or even exceed - consumers' expectations for the category in which it competes).
Marketers will realise that attaining real brand engagement is impossible if they continue to try to measure it using out-dated attitudinal models. Marketers will come to accept that there are four engagement methods including Platform (TV, online), Context (programme, web page), Message (advert or communication), and Experience (store or event). But there's still only one objective: Brand Engagement.
- Media planning will be more innovative Planners will still classify media touch points as "above-the-line", "below-the-line" and "new", but planning will be based on some critical considerations: Which touch point will best reinforce brand values? Where will the brand + media equation yield real engagement?
Effectiveness will result only where the plan is seamless, believable, personalised, and authentic. Media planning innovation and technological innovation will become one and the same. Mobile devices are becoming an increasingly important touch point for consumers and in 2009 will be a starting point for migration from desktop to laptop to blacktop. Location-aware software for phones should inspire the mobile medium, so expect promotional coupons to show up along with instant messages, and also look for greater granularity in measuring marketing ROI. Marketing dollars transitioning to online isn't new, but social networks will also become more engaged in engagement to help marketers more effectively deliver messages and determine return on their efforts.
- How green is my brand? Simply playing in the environmental awareness arena will not be an option in 2009, and brands will have to find ways of positioning their offerings in ways that meaningfully support a sustainable future. But as the number of companies trying to co-opt the environmental movement for their products and services grows, so too will the number of sceptical consumers. Most consumers have heard these promises before and will begin to demand evidence and authenticity.
Measuring that authenticity and the degree to which the brand is perceived by the consumer to really be green will become more necessary than in the past. Possessing such measures will provide insights and strategic direction that will aid in brand differentiation, the creation of added value, increased consumer engagement, and, the ultimate bottom line, profitability.
- Brands must identify and leverage new values Happily, loyalty and engagement metrics identify trends and values that will be more important to consumers many months before they are blips on traditional research radar screens. Looking at the 60 categories and nearly 500 brands we measure in the Brand Keys Customer Loyalty Engagement Index, the average percent-of-contribution that "customisation" makes to product and service engagement, adoption, and loyalty is currently 18%. That's nearly 5 times what the value was when it was first measured it in 1997. Watch for customisation - the newest of the loyalty values - to become something marketers will be paying greater attention to.
- Behaviour will finally beat attitude More marketers will come to realise that to know you is not necessarily to buy you (or, for that matter, even to like you). Brands will need to recognise - and address - real behavioural metrics. Corporations will use the identification of behavioural consumer segments to synergistically reinforce brand values, brand and corporate positioning efforts, communications, and media planning to make the marketing function much more effective and efficient.
- Consumer expectations will continue to grow Brands are barely keeping up with consumer expectations now. Every day consumers adopt and devour the latest technologies and innovations, and only hunger for more. In 2009, expect smarter marketers to identify and capitalise on unmet expectations via newly identified values (like customisation), using more and more high-tech systems. This approach will help them differentiate brands from competitors, and brand-consonant touch points (like mobile marketing) will play a major role in meeting and managing consumer expectations.
- Make life simple for your brand and your customer Consumers are searching for - and in fact demanding - simplification. In some categories this is showing up particularly strongly (such as cell-phone plans, search engines, and laundry detergent). Who has not looked at switching cellular carriers and bemoaned the task of comparing one complicated plan to another? Simplification is also showing up as a driver for online travel sites (itinerary planning, for example). However, as the competition has heated up, many brands still continue to compete on price rather than factors such as simplicity, which can actually engender positive consumer behaviour.
According to Passikoff, "The future may not be what it used to be, but brands can be sure that it will pose a more difficult time for marketers. But marketers and planners that have loyalty metrics in place will have a handle on the trends that are bound to show up in their offices."
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