Are Brands Connecting Emotionally With Consumers?
By Bernice Hurst, Contributing Editor, RetailWire
In its recently published Customer Loyalty Engagement Index (CLEI), Brand Keys tracked brands in categories such as beverages, quick service, pizza, banks, beer, car insurance and cosmetics amongst others. As qsrweb reported, emotional engagement proved the most important factor in purchasing decisions and brand loyalty. Its 17th annual report showed promotions and discounting reaching "saturation levels."
To create "points of differentiation," brands need to meet customer expectations of empowerment and discounting by using social networks to build communities. Brands cited as successful in this goal, and therefore building high levels of loyalty, included Dunkin' Donuts (in two categories), Coke and Diet Coke.
Robert Passikoff, Brand Keys' president, explained that marketers without handles on "the emotional side of the purchase and engagement process" may become what he calls "placeholders" whose "name people know but don't know for anything in particular and have absolutely no [brand] advantage in the marketplace," adding "if that's where you are, you might as well spend your entire marketing budget on coupons, deals, and promotions."
The company's blog explained, "Last year, the Brand Keys Customer Loyalty Engagement Index found customers were looking for 'delight' from their brands. This year evidence mounts that it's still delight that will continue to define the consumer landscape, and what brands can do to cement customer loyalty and profitability."
The blog added that 49,000 consumers "self-selected among 598 brands in 83 diverse categories" and assessed them "based on an independently-validated technique that fuses rational and emotional aspects of the categories, using a combination of psychological inquiry and higher-order statistical analyses." This technique "has been used in B2B and B2C categories in 35 countries around the world and is proven to identify the real category drivers for the consumers' ideal. Along the way it allows us to determine how well brands meet — sometimes even exceed — expectations consumers hold for the Ideal in their category."
Although expectations varied by category, Brand Keys concluded that success comes from understanding the link between differentiation and delight. Those attributes related to "experience" and "brand values" proved to be most important when it came to decision-making, expectations and engagement.
How well do retailers recognize the value of emotional engagement? What are the best methods merchants can use to connect on an emotional level with shoppers?
Comments from the RetailWire BrainTrust:
We put words together like emotion and engagement as if they have to go together. Emotion in decision-making simply might refer to learned rewards that become part of the dopamine-based, emotional decision-making system (Lehrer's book).
I find it hard to believe that more than 15% of buyers or 50% of business is driven by engagement (based on Hendry curves, shopper research about decisions made in store, low percent of buyers who like a brand on Facebook). Hence, any explanation of brand performance that is completely rooted in emotion + engagement is a partial explanation at best.
Joel Rubinson, President, Rubinson Partners, Inc.
The challenge is how do you measure emotional engagement? Happiness? Satisfaction? The bean counters want verification—I paid X and received Y. That "fuzzy stuff" is hard to prove [in terms of] ROI so it has languished. Just like what we're seeing in education—that if it can't be tested, it doesn't get funded.
This study seems to say if you aren't going to engage, just spend all your money on discounts and own the space as a placeholder brand. If ever there was a recipe for a zombie retailer, that would be it.
Bob Phibbs, President/CEO, The Retail Doctor & Associates
First of all I have no earthly idea what, "an independently-validated technique that fuses rational and emotional aspects of the categories, using a combination of psychological inquiry and higher-order statistical analyses," is—or might be, but it seems a convoluted way of validating the obvious.
In mature product categories, brands must clear all the standard hurdles—say taste, packaging, efficacy, price, etc.—just to survive. Of those surviving brands, the winners will be those that transcend the demands on form and function—which all brands in the category probably meet—and form some kind of emotional bond with a consumer.
Do retailers value this principle? In the main, absolutely not. This is the ground retailers voluntarily ceded to the manufacturer.
As is so often the case, the exception proves the rule. Look at Wegmans, Trader Joe's and Whole Foods; all have done a great job of building this emotional relationship and have, as a result, separated themselves from the pack.
Ryan Mathews, Founder, ceo, Black Monk Consulting
Retailers are often too fixated on "operationalizing" a particular initiative and often do so at the cost of efficacy. Furthermore these initiatives are rarely implemented because it's what their shoppers really want, but rather another effort to push something onto their shoppers because they can. An emotional bond is built with a brand over time and is founded upon a dialog.
Shoppers want their opinions and wishes to be heard and acted upon by the retailers. These exchanges or, more accurately, the implementation of these customer wishes, are often very difficult to implement in a meaningful way, but that is the challenge brands face today. Listening to and activating even the smallest shopper request will reap rewards and begin to build an emotional bond with your customers.
Adrian Weidmann, Principal, StoreStream Metrics, LLC
Brands are better at emotional engagement than retailers, and this has been the case for a long time. While there are exceptions like Nordstrom, most retailers are unwilling to do the heavy lifting needed to turn satisfied customers into committed ones. The perfect example is the large number of so-called "loyalty programs," which are really focused on price incentives instead of true loyalty.
Not every CPG company is equally adept at building brand equity, but most of them put retailers to shame.
Dick Seesel, Principal, Retailing In Focus LLC
First: discounts are easy, emotional connections are hard. Brands and retailers have to make a huge commitment strategically to connect to their customers in an emotional way or it's not going to ever happen. In fact, I'll argue that the company culture has to be based on this idea or else, any attempts will be fraught with failure.
We know the examples of brands and retailers that delight their customers because unfortunately, they are the exception. Nike, lululemon, Nordstrom, Apple, etc. have made their customers their culture and focused products and service on the elusive goals of delight and amazing user experiences. Just look at Microsoft, always trying to play catch-up to Apple in this area and never achieving it, likely because the culture (starting at the top) doesn't see things this way.
Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive
This is a really interesting way of thinking about a product or service. Emotional engagement goes on every day in stores, and in some of the products. Look at the iPhone, as consumers get a real attachment to the Apple products, and the satisfactory level of Apple in general is very high.
Great service is an emotional component that enhances the product experience; just ask a great chef in a restaurant about his personal dealings with the customers. Believe me, it is easier to sell your products if the personal touch you give to your customers is outstanding, and we can as owners do a better job of this in training our employees.
No matter what you do for a living, you are selling something, and the emotional experience will vary from one person to another.
Tony Orlando, Owner, Tony O's Supermarket & Catering
Consumers expect retailers to listen to their opinions, offer products and services at a reasonable price and do this in a welcoming, friendly atmosphere. Retailers that do all three will build loyalty. This is not easy to do. Too often retailers only offer one or two of these attributes and feel that they are adequately serving their customers. The result is a less than satisfying experience. That might work for a while, but it does not build loyalty.
Max Goldberg, Founding Partner, The Radical Clarity Group
The loyalty aspects of CPG products should be more often leveraged to retailer "brands." Social channels are the human digital extension of emotions. Therefore when one looks at the following and passion aligned with great CPG brands, we cannot help but think about the very few retailer brands that have similar followings.
The retailer brands have a commitment to their communities and keep their digital presences fresh and interesting. You can't post random, obligatory thoughts in social channels and expect a true following.
Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM
The consumer purchase decision process has been studied for decades by some very qualified researchers, using increasingly sophisticated tools. But it seems to me that the complex analytics may be clouding the fundamentals, which I think are still valid.
Setting aside all the price/value messages because they connect with the intellect rather than emotions, a new brand wants to create curiosity so the consumer tries it. An existing brand wants to build trust so the consumer repeatedly uses it.
"Delight" is a nice goal, but if it is not delivered each time, there goes trust. And there goes the repeat purchase.
Dan Raftery, President, Raftery Resource Network Inc.
The seminal work on this topic is "Emotional Branding" by Marc Gobe. Well worth a read.
The inverse can work too. In categories that are built around emotional appeal, coming up with a functionally oriented offering can help a new brand or retailer stand out. Great example is what the Body Shop did to the cosmetics category.
Martin Mehalchin, Partner, Lenati, LLC
My experience has been that retailers talk a good game in terms of emotional engagement, but fail to take the essential actions that will produce that result. Remember, emotional engagement is usually the result of customer experience, and customer experience is the result of store associate empowerment, training and sufficient staffing levels to permit superior service.
Most retailers seem bent on saving their way to prosperity, where they cut and cut staffing to the point where the associates are just trying to stay above water. At the same time, lack of training and empowerment lead to very high attrition rates.
If retailers really want to drive loyalty they have to staff for it, with the right people, paid the right wages, with the right training and the right culture (recognition, measurement and empowerment). When they do, the results are dramatic. Yet most retailers fall back on the old approach of reducing staffing and training....
Mark Price, Managing Partner, M Squared Group, Inc.