From Loyalty to Love: Why Focusing on the Heart is the Recipe for Retail Success
It wasn’t that long ago customer loyalty meant something to brand marketers. If you held someone’s loyalty, there was little question you controlled their purse strings, and it took a significant amount of strategic effort to sway, say, a Coke drinker to become a Pepsi drinker. In 2019, however, loyalty has become a bygone buzzword. So much so that in its most recent Meaningful Brands report, Havas indicated that "nearly 80 percent of brands could disappear and no one would care.”
Given we’re facing an impending recession here in the United States, and retail is always a sector hit hardest when the economy experiences a downturn, there’s a very present likelihood that a significant amount of brands could continue to disappear. According to MoneyWise.com, to date we've already eclipsed the number of store closings for 2018, although I would argue most of these recent closures are in large part due to brands’ inability to adapt to today’s customers rather than the state of the economy.
That is to say, rattled enough by the last recession, retailers that are still struggling to adapt to a world where consumers are no longer blindly brand loyal are already feeling the heat.
As marketers brace for a potentially challenging Q4, they would be wise to embrace the emotional side of the business. What consumers do, how they feel, what they think about … all of this information can help us understand and predict shopper behavior more precisely than loyalty data ever could. Emotional data, or what I like to call “customer truth,” actually has a 1.5x greater impact on driving sales compared with other factors, according to research my company recently embarked on with Forrester.
For any brand looking to embrace emotion in 2019, the two-fold strategy is simple.
Stop Relying Solely on Big Data
More than half of brands interviewed said their marketing strategy is informed nearly or fully by big data. However, what sounds great actually points to a gaping hole in consumer understanding. By over-relying on big data-like loyalty program activity and historical purchase behaviors to understand customers, brands have missed the full picture of customer activity. It’s no surprise, then, that nearly two-thirds of the brands we spoke with have zero clarity into why a consumer opts to buy from a competitor (although 91 percent agreed that customers want convenient and highly personalized experiences). There’s a depth of insight that comes with pursuing customer truth that ultimately leads to increased revenue, advocacy and, not coincidentally, loyalty. Knowing how your brand makes your customers feel will give you that predictability.
Invest More Resources to Cultivating Small Data
Cultivating an understanding of how customers think, feel and act takes time. However, brands that do the right market research — tactics like qualitative interviews and studies, and effective surveys — to paint that holistic picture are able to better predict business outcomes. Why? Small data simply does a better job of showing emotion, and those that prioritize small data on an ongoing basis are actually more likely to know why their brand wins over the competition.
Ultimately, brands need to be using the right tools in order to ask the right questions and get the right data. If you want to truly understand how customers think, feel and act, you need to find ways to invest in the way people work, the processes that connect them, and the technology to gather, analyze and share insights.
Dawn Colossi is chief marketing officer of FocusVision, the market’s most comprehensive suite of experience insights software solutions, including advanced survey, online interview and focus groups, and online qualitative research community solutions to get brands close enough to their customers to have a full understanding of Customer Truth™ — how they think, feel, and act.
Related story: The 3 Components to Emotional Loyalty
Dawn Colossi is Chief Marketing Officer of FocusVision, the market’s most comprehensive suite of experience insights software solutions - including advanced survey, online interview and focus groups, and online qualitative research community solutions to get brands close enough to their customers to have a full understanding of Customer Truth™ -- how they think, feel, and act.