CUSTOMERS ARE SEEKING A PERSONAL RELATIONSHIP WITH YOUR BRAND

Irrespective of how appealing and engaging you are, most customers are not actively seeking a relationship with you.

It is not that surprising that brands often see their primary responsibility as building deep and continuing relationships with customers. Indeed, practitioners often talk about the importance of building valuable relationships and a whole industry, customer relationship marketing (CRM), has grown up around the idea that the majority of customers are seeking some kind of personal relationship with their favourite brands. As convincing as all this may sound it is largely a myth.

Don’t assume you have permission to start a relationship

Let’s start with the idea of a personal relationship. While you may identify with, engage with, and enjoy the company of many people, you will have a much smaller set of people that you would describe as being intimately connected with. The same applies to brands. While you might identify with a brand, engage with a brand and even value a brand, you are (in most instances) unlikely to be seeking an actual relationship with that brand. You may respond emotionally to a brand but that isn’t necessarily the same thing as wanting a deep personal relationship. The power of a brand vests in its ability to build an emotional connection but (as in many aspects of life) we shouldn’t automatically assume that this means it has permission to start a relationship.

The evidence backs this up too. In 2012 the Harvard Business Review published an article, ‘Three myths about what customers want’, in which they warned practitioners to be wary of the idea that customers are seeking relationships with brands. After running a study with 7000 consumers they found just 23 per cent of those surveyed described themselves as being in a relationship with a brand. The majority, 77 per cent, didn’t actually perceive themselves as being in a relationship with any brand. Interestingly when the majority were asked why, they typically responded with comments like: ‘It’s just a brand, not a member of my family.’ So while a significant minority of customers are open to a relationship (and we will explore this later) the majority, it turns out, are not.

So what are the implications of this? Fundamentally that we should be wary of overstating the amount of time and attention that brands occupy in our consciousness. This does not mean that brands can’t occupy a valuable piece of mental real estate in the minds of customers, but we should be realistic about the time customers are likely to spend contemplating their relationship (or indeed the relative differences) between brands. Instead of bombarding customers with hundreds of emails that attempt to infer a relationship that most likely doesn’t exist, focus instead on making your brand distinctive and engaging. As Deloitte stated in their July 2017 Consumer Review: ‘Winning and retaining customers in the digital era requires a mix of personalization, relevance, exclusivity and engagement across all the different channels.’

That said; we should not forget the opportunity afforded by the 23 per cent of customers that are open to a relationship. These customers are likely to be highly engaged and particularly responsive to brands that are perceived as meaningful or purpose-led. Customers in this group have the propensity to become good customers, passionate brand advocates and valuable super-users. Nonetheless, we should not make the mistake of assuming that the majority of customers want a personal relationship with a brand; most customers simply want to be engaged, recognized and incentivized.

Customers may not want a conversation with you

As well as having a healthy scepticism for the idea that customers want a relationship with your brand, you should be similarly suspicious about the idea that your customers want a conversation with you. Most do not. This misunderstanding probably contributes significantly to the erroneous idea that most customers are seeking some kind of relationship. There will be times when customers want to talk directly to brands, but on the whole this will be to notify the brand or operator that something has gone wrong. It is vital to provide your customers with different ways of contacting you and it is very important that you listen, take appropriate action and don’t attempt to muzzle legitimate complaint. But don’t confuse these situations with a desire to start an actual conversation. Customers generally want brands to quickly and efficiently remedy any lapse in service and remediate any financial loss. In these circumstances they will usually find attempts to start a ‘conversation’ both patronizing and irritating.

The truth is that most customers would rather talk to each other. Most people don’t want to have a conversation with a ‘brand’. They want to talk to other people who share the same values, beliefs or interests as they do. Ergo, the most influential communities that surround some of our best-known brands often comprise fiercely independently minded individuals who are hugely passionate about either the brand itself or the activity to which it is connected. PlayStation and Harley-Davidson are two brands with very active communities. PlayStation provides an online space for gamers to connect. They have made it easy for users to home in on their specific interests or to find help and support. The site supports the creation of user-generated content and PS4 users can upload in-game clips directly online. The community is linked to PlayStation’s social media channels on YouTube and Twitter, allowing content to be shared by gamers, developers and key titles. Harley-Davidson has been supporting the development of its community (Harley Owners Group) since the 1980s. It reportedly has over a million members and is a community centred on a shared passion and lifestyle.

Help your supporters talk to each other

These brands have realized that their role is to propagate and support a community rather than try to dominate it. They occasionally post content and updates but otherwise leave the community to thrive and develop. Some of the most influential and useful online communities are unofficial communities like this. Lugnet, for example, is one of the largest unofficial communities of Lego fans, comprising mostly adults who build complex Lego projects and share their work. Lego has acknowledged its role as a valuable source of information and insight.

Starbucks has supported an online community, called My Starbucks Idea, and in effect engineered the creation of a global suggestion box. It encourages ideas and suggestions from the 150,000-plus community members on how to improve the customer experience. It then implements what it perceives as the best ideas.

Customers can be incredibly passionate about their favourite brands, but this passion should not be misinterpreted as a signal that they are looking for a personal relationship. Most are not.

Customers may be less loyal than you think

For a long time it was assumed that loyalty programmes were great ways of building meaningful relationships with customers. As data collection and analysis became more sophisticated, brands like Tesco were able to use this data to offer groups of customers’ highly targeted coupons and incentives. Not only did Tesco attribute much of its stellar growth to the success of its Clubcard programme, the belief was that Tesco had built strong and enduring personal relationships and had effectively ‘locked-in’ customers. Then came the 2008 financial crisis and shoppers’ habits quickly began to change. It turned out that for the ordinary ‘cash-strapped’ shopper what mattered most in their decision about where to shop was the price they paid at the till. Shoppers quickly changed their habits. They started shopping more frequently and while they would still treat themselves to the occasional indulgence, shoppers were now sourcing the majority of their everyday items as cheaply as possible. Retailers like Tesco quickly discovered that in the midst of a downturn their customers were less sticky than they had thought.

Of course, as loyalty programmes became more ubiquitous and possibly less generous, their power undoubtedly diminished (to the point where many have become tedious), but this also serves to illustrate the wider point that customers are perhaps more promiscuous than practitioners would care to admit.

Use the right tools for the right kind of customer

As a consequence of all this, there is now a lot of debate about the value and usefulness of running a loyalty programme. Many commentators feel it is difficult to justify the investment of such a programme (at least on the basis of a straight financial return) when money might be more effectively spent elsewhere. The logic is not to spend money trying to make customers committed; rather, you should keep them interested, engaged and incentivized.

The same applies to the use of email marketing. There is little doubt that email can be a highly effective sales tool but it needs to be used sparingly. A customer might well be interested in the occasional targeted sales promotion, but on the basis that they are probably not seeking a relationship with you, don’t bombard them with unwanted chatter and daily incentives – these activities are likely to be irritating as well as potentially damaging to your longer-term brand equity.

Of course, we know that there are a minority of customers who don’t mind being in a relationship. These customers can be nurtured and treated differently (especially in high-value, high-status categories). But it’s important to remember that irrespective of how appealing and engaging you are, most customers are not actively seeking a relationship with you.

There is good news, though. Once you fully embrace this reality you can become a much more effective practitioner. Once you have identified the different types of customer, you can start treating them in ways that are likely to elicit a better and more valuable response. You can build a deeper discourse with the minority of customers who are seeking a relationship with you and harness their power as brand advocates and future community leaders. You can invite them to insider events, reward their affinity and recognize their role as a source of insight and inspiration. Burberry does this very effectively. It has a well-deserved reputation for making its brand more accessible and easier to interact with. Customers who are highly committed to the brand or people who are seen as important influencers or celebrities are regularly invited to catwalk shows and other VIP events. These events provide opportunities to build engagement and associate Burberry with glamour and prestige.

The mobile network giffgaff has taken this idea a step further and created a network effectively run by its community of customers. At giffgaff the customers are the customer services team; as well as solving a range of day-to-day problems, the community is consulted on a range of issues including potentially sensitive subjects, such as price rises. As customers are effectively responsible for managing the first tier of customer service, things are dealt with quickly and efficiently. Additionally, as the business is operating with a relatively small overhead, customer pricing can then be kept as low as possible. Not all customers will be active participants in the community, but the business is making efficient use of those who want to be.

Harvest the benefits of being more realistic

So what about the majority of customers who may find you appealing and engaging but who are not necessarily seeking a personal relationship with you? Well, the good news is that you can stop wasting your time trying to build a deeper relationship with them and devote your resources to becoming more relevant and appealing. We believe that modern practitioners have always tended to overestimate the role that their brand plays in the lives of their customers. Once this is recalibrated and a more realistic view taken on the nature of the relationship we are seeking with brands, then the practitioner is liberated from the constraints of the past.

Importantly this liberation shouldn’t just be interpreted as a quest for transactional ease. We aren’t advocating a race to bottom, where brands compete solely on the basis of price or how easy they are to interact with. Being easy to find and easy to do business with are undoubtedly important but it is unlikely to be a long-term source of competitive advantage. Just because the majority of customers do not want to be in a relationship with us, it does not absolve us of the need to be interesting, engaging and relevant.

While the tools and techniques used to build brands have undoubtedly changed, the basic appeal of a brand has not. A brand works because it is able to establish a mix of emotional and rational associations that exist wholly in the mind of the customer; these distinctive and sometimes unique associations help to differentiate the goods and services of one undertaking from that of another. Brands are valuable because they are difficult to copy, they help to generate demand and they can help support an enhanced price position.

Stay ahead of your customers’ needs and motivations

Practitioners should keep in mind that as well as minimizing the pain for the customer, part of their job is also to maximize customers’ utility and enjoyment. A brand needs to work hard to maintain its relevance and it needs to ensure that it is always keeping up with (if not ahead of) its customers. Customers’ needs and motivations constantly change and understanding how these shift is critical to staying ahead. This is particularly important when we already know that most customers are reluctant to become too intimate, even with the brands they really like. Thus investing in and acting upon genuine insight become very important. A brand may find that it is struggling not because of ease or availability but because it is not aligned to customers’ changing needs or motivations. Who knew that customers would be persuaded to buy a computer based on how it looked rather than how it performed? Steve Jobs did. He realized that there were motivations and requirements not being satisfied by the status quo. Who realized that customers’ faith in air travel was sufficiently established to presage and facilitate the arrival and growth of the low-cost operator? Southwest Airlines did. Who spotted that the men’s razor category was out of ideas? Dollarshave Club did and as a consequence of their entertaining and disruptive approach they finished up being bought by Unilever for $1 billion.

The danger of ignoring changing needs and motivations is clear for all to see. M&S Clothing, Mothercare and House of Fraser are all examples of brands struggling to stay relevant. Brands that are perceived as ‘stuck in the middle’, offering middling products at middling stores for middling prices are in trouble. These brands will continue to struggle until they better understand and act upon the needs and motivations of their shoppers. No amount of store closures and retrenchment alone will be sufficient to address the problem; an imaginative and informed approach is required.

Be wary of the idea that the majority of customers are seeking a personal relationship with your brand; most of them are not. Recognize this and you can start to build a more effective brand. Nurture the smaller cohort of customers who are open to a relationship and help them to build a community where customers can talk openly to each other. Use the money you would have spent trying to build relationships with customers who aren’t interested, to sharpen your offer, build distinctiveness and use insight to stay with and ahead of changing customer needs and motivations. By all means make things easy for your customers but don’t assume that’s all you need to do.