Think You’re ‘Relationship Marketing Ready’? Think Again.

In this guest piece, Miles Toolin (pictured), senior solutions consultant at Cheetah Digital, breaks down how brands can jump in on the rising consumer interest in relationship marketing.

Aussie consumers have low levels of trust for advertising, but will pay more to purchase from a trusted brand, a new report from Cheetah Digital reveals.

What can marketers do to keep up with this seismic shift in consumer expectations where hyper-personalised relationships with brands are the only way forward? This question – and more – was unpacked in a recent Cheetah Digital-hosted webinar I was a part of, alongside an expert panel of guests, including: Teresa Sperti, founder and director at Arktic Fox, and Adam Posner, CEO and founder, The Point of Loyalty.

Social media’s erosion of trust

According to Cheetah Digital’s new Digital Consumer Trends Index, 67 per cent of consumers in Australia do not trust the advertising they see on social media platforms. And more than half (63 per cent) don’t trust social media platforms with their data.

Teresa Sperti, founder and director at Arktic Fox doesn’t find the results surprising at all. “Over time, there has been an erosion in the level of trust for social platforms,” she pointed out. “As a whole, this has led consumers to be increasingly wary about the information they provide on these platforms and how their data is being utilised.”

She credits this erosion of trust to a couple of things. First, consumers are concerned about the social impact these platforms have on society; and secondly, consumers are worried about the approach that’s taken to harvest their data. A recent Washington Post poll finds that, of all the large tech companies, social platforms like Facebook and Tiktok have the lowest level of consumer trust. In fact, 72 per cent of Internet users rated their level of trust in Facebook as “not much” or “not at all” to responsibly handle their personal information and data on their Internet activity. And roughly six in 10 distrust TikTok and Instagram, while slight majorities distrust WhatsApp and YouTube. This decline in trust mirrors Cheetah Digital’s findings to a T.

“From a data privacy point of view, consumers’ expectations are changing broadly,” Sperti added. “Consumers are less trusting of brands when it comes to providing data. They don’t believe brands can be trusted to protect personal data or utilise it effectively. As a result, we’re seeing a wave of greater skepticism from consumers as a whole.”

Posner Posner, CEO and founder at The Point of Loyalty, agrees, pointing out the disruptive aspect of social ads. “The ads interrupt and are, oftentimes, irrelevant. But even more, they’re invasive. That aspect of social ads feels creepy, which works to erode consumer trust as well,” he said.

It’s ironic when you consider that social platforms emerged as a way to drive engagement with the audience. Since it’s moved into a sphere of profit over people, they’ve moved further from their reason for existence.

“These days, it’s all about monetisation of the platforms. As they’ve increased the amount of advertising, consumers have become bombarded with all kinds of messages,” Sperti said. “It’s become hard for consumers to decipher what’s ‘fake news’, if a product is quality or if they’re potentially being taken for a ride.”

Posner brings up the idea that, on these platforms, the consumer is essentially the product. “It’s a real awakening,” he said. “Consumers are realising that if they’re the product through their data, then that means they’re valuable. So, naturally, they’ve become even more protective over their data.”

It seems what that’s creating is a data economy as a consumer. We’re going to see a shift to a value exchange where the platform says ‘give me your data, and I’ll give you something to make it worth your while’. That’s when social platforms will start regaining consumer trust.

Sperti added: “Customer expectation is changing. The brands that are going to win moving ahead are those that have earned the right to effectively communicate, earned the right to be entrusted with data and are able to retain the right to utilise that data. And a lot of that comes back to control and consent.”

Meanwhile, Cheetah Digital’s report also shows that email still reigns supreme when it comes to driving sales, beating paid social and display advertising by up to 228 per cent. “The statistics don’t lie. We’ve gone back to the future of marketing, in a sense. In light of all the creepy advertising, marketers are going back to the basics of building a brand. And that’s putting the spotlight back on email.

“Email continues to be a trusted channel. At least 90 per cent of consumer brands have emails and it’s widely accepted. So it’s a great foundation and super effective for marketers.”

Loyalty drives relationship marketing

The findings in Cheetah Digital’s report signal a new era of relationship marketing. 63 per cent of consumers are willing to pay more to purchase from a trusted brand. Almost half (40 per cent) of consumers in Australia are more likely to take part in loyalty programs compared to last year. And 24 per cent of consumers left their favourite brand because they didn’t feel valued as a customer.

Relationship marketing, to me, is personalisation on a deep one-to-one level. It’s really about understanding your consumer, listening and building a relationship with them. It’s marketing to them the things they actually care about. Because that’s what relationship marketing is all about, caring about each other.

“There are many layers to relationship marketing,” Posner added. “And a lot of it is contextual. Some customers might want a transactional relationship with one brand and a more personalised relationship with another. But all customers want acknowledgement and appreciation.”

In today’s competitive landscape, brands are finding it increasingly challenging to maintain loyalty and build strong relationships, Sperti says. Even more, many marketing teams are pushed to do more with the same resources. It’s the perfect storm, keeping their relationship marketing strategies stagnant and transactional.

“Many are still very transactional and predominantly focused on delivering business outcomes rather than providing real value to the customer,” Sperti pointed out.

“Value exchange is so important. Yet it still feels like much of the activity that brands are driving to market is about what they want the customer to do and what outcomes they’re looking to achieve as opposed to truly understanding what it is that the customer wants.

“You have to go out and talk to them. As brands, we’re still not very good at listening to our customers. It’s really hard to do relationship marketing when we don’t understand our customers intimately.”

A brand that is hitting it out of the park when it comes to relationship marketing, Sperti says, is Starbucks. “Starbucks invested early in understanding the customer and driving loyalty. It knows that in an ever-changing landscape, its customers want convenience and frictionless experiences. The experiences that Starbucks has developed deliver true value to its customers.”

The panel agrees that it can be challenging for larger organisations, driven by short-term revenue focus and operating on legacy systems, to drive relationship marketing. Niche brands, however, don’t share the same burden. They can capitalise on making every moment matter, down to a simple, yet thoughtful, handwritten note of thanks in a package.

Personalisation and the value exchange

In a world that’s increasingly focused on automation, it can be challenging to bring in the human touch. But it’s essential because that’s what consumers demand. In fact, according to Cheetah Digital’s report, 52 per cent of Australian consumers are willing to share personal data to feel like they are part of a community. And more than half (56 per cent) of Australian consumers feel frustrated when they receive irrelevant content or offers.

“We’re increasingly moving into an era where data ethics is more than optional, it’s critical,” Sperti said. “That means brands must go further than simply focusing on privacy compliance. They have to put customers in the driver’s seat with their data.

“That’s going to be a significant shift for brands after an era where they once mandated how customer data would be used. It’s not sexy, but brand reputation will be tied to how brands operate around data, and data ethics is going to be paramount.”

I couldn’t agree more. Data ethics plays heavily into data strategy as a whole too,” Posner said, before asking if anyone could remember the last time they actually told a brand what their preferences were. And for the most part, they couldn’t.

And brands haven’t done a good job at educating consumers about the value of providing data. “The challenge has been that many brands have promised that if customers provide their data, then the brand will provide a great personalised and seamless experience,” Sperti asserted.

“That’s never come to fruition, though, because many brands haven’t worked out a way to execute it. As we move into an era without third-party cookies, people will begin to realise the value of brands having their data, such as those curated experiences.”

Posner added that expectations bring responsibility. “Customers are saying, ‘I’m giving you all of my life with my data, use it to add to my life; don’t use it and abuse it.”

He also shared that when it comes to loyalty programs, there are essentially three fundamental ways they can fail. “I use the acronym SPV – Simple, Personal and Valuable – and you can see failures in any of those,” Posner explains.

“Joining a loyalty program should be simple. There should be no mountains to climb or mental gymnastics needed when entering your details. The value element is quite deep, going beyond financial into experiential value. Make sure you give customers a choice.

“And finally, when it comes to personalisation, don’t forget the last mile. Don’t send irrelevant messages after the consumer has already purchased something from you. That’s an epic fail.”

Access the webinar free and on-demand here.