In this guest post, Signavio ANZ Country Manager Andrew White pens how brands can connect the dots between their customer journeys and the people, processes, decisions and IT systems that drive them, to power innovation and competitive advantage.
The overarching aim for companies, and their subsequent brands, is to engage with people successfully. Over time, the idea of a brand has changed – originally it implied ‘to mark’ as in, a form of ownership. In today’s age of choice, branding is moreso a symbol of quality – the idea that a brand’s loyal, or even obsessed, customers will choose them based on the high calibre of their offerings.
This change in nature means authentic branding requires increasing effort, because once a customer buys-in, there is no guarantee they will stay loyal. Brand recognition is the bare minimum – an associated logo on its own won’t inspire devotion, however – brand awareness, which are the emotions, information and general impressions a person has when they engage with your business, will.
Positive brand awareness is the key to customer loyalty, although to foster it successfully you must look beyond your product offerings, range and price comparisons to connect with your consumer base through support, empathy and empowerment. Businesses must wake up to the reality that they must be customer-centric in order for loyalty to be reciprocated.
The support from an actively loyal consumer base is unparalleled – here’s why:
Consumer voices are louder than ever
The digital age means many companies have an internet presence whether they’ve actively built one or otherwise – in fact, 87 per cent of shoppers now start their search online instead of physical locations.
From a branding perspective, this can be a double-edged sword. Consumers have been given a voice that is louder than ever, which means they have the power to be innovators and marketers with ever-increasing control. They can freely rate, review and share their opinions, while brands have the ability to interact, respond and comment – significantly impacting how they are perceived. Word-of-mouth can become user-generated content for a business, and companies can deliver new products that gain visibility instantly, without having to spend exorbitant amounts of money on advertising and infrastructure.
On the flip side, if the ‘customer is always right’ methodology is really true, brands must be prepared to empower both positive and negative opinions. A bad review can be seen instantly by millions, collapsing a brand’s reputation in mere minutes. Relinquishing this control can be challenging, especially for archaic institutions that still consider branding a form of ownership, rendering them incapable of listening, interacting or reflecting. No matter how good your offering is, if customers feel neglected or unheard you will lose their trust and loyalty.
Customer centricity empowers growth
No consumer should feel like they need a doctorate in research to compare the market, yet looking for new products, price matching and differentiation is still hugely complex. This is prevalent especially in established industries that believe what’s been done successfully in the past will carry them in good stead for the future. What this really means is that they have a legacy problem; a lack of incentive to develop innovative new products or improve customer service standards.
New products and services are developed as creative answers to modern pain points for consumers. This goes hand-in-hand with customer loyalty, as those businesses that strive to understand the needs and wants of their customers are also focused on offering them the best solutions. This customer-centric mindset acknowledges that in order to gain loyalty, you must provide it too.
Well-functioning markets encourage choice and participation, which drives down price thereby fuelling innovation and efficiency. This has a positive effect on not only consumers, but the broader economy too, as innovation and products become more competitive.
Investing in customer loyalty leads to sustained market share and growth opportunities, yet it’s common practice for businesses to ignore their existing customers in favour of attracting new ones. This has a funnel effect: companies are forced into a spiral of deeper and deeper discounts to attract new consumers to their pool, which eventually runs dry along with their revenue streams.
Research by Forrester shows that new customers can cost five times more to convert than existing customers. As well as this, it’s typically the loyal consumers that end up paying for the cheaper deals offered to the impartial ones. This means long-term customers are penalised for not being willing or able to switch, ultimately punishing them for their loyalty.
The essentials services market is yet to cotton-on to retail market practices where loyalty is praised with rewards points, discounts and perks – not penalties.
Disruption drives change
Disruption has been the biggest changemaker of the 21st Century – globalisation, technological advancement as well as mobile and social connectivity has had a profound impact on the way we do business. While it might seem like a corporate buzzword, in the context of branding, ‘disruptors’ refer to anyone that floats a concept garnering the attention and respect of an audience.
The modern, empowered consumer is enabled by disruptive technologies to explore the market, forcing brands to find new strategies that tighten their consumer value and extend the loyalty of their customers. As a result, expectations have sky-rocketed leaving inflexible firms behind.
Virtually no function within consumer industries will be left untouched as the modern customer continues to transform the nature of brand loyalty. Although it takes commitment to maintain and grow a consumer base, loyalty will guarantee the most robust and sustainable future for businesses navigating the disrupted markets of our day and age.
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