What drives loyalty? Trust. How do we build trust? Understanding. If understanding is the path to loyalty, insights pave the way. Those insights are increasingly being fueled by Big Data: In the past two years, 90 percent of the data in the world has been created. The challenge now is to understand what information would be most useful in shaping both our message and the medium to engage those key, loyal, consumers.
Big Data can be both exciting and paralyzing. It promises to drive both efficiency and effectiveness. However, not everyone has access or the ability to integrate and analyze the data. While many manufacturers and retailers are knee-deep in consumer and shopper segmentation models, a recent Loyalty 360 survey reported that almost half of responding executives couldn’t identify their best customers.
Identifying your target is a crucial first step, and from there you must identify what drives them as both consumer and shopper. Most of the data collected is behavioral, which helps us with the who and the what, but not the why. To drive relevance, it is critical to focus on both the what and the why — for both consumers and shoppers.
For example, let’s say that you make single-serve snack food and, in reviewing the shopper’s basket analysis, you find all sorts of single-serve foods. It is easy to jump to the conclusion that the consumer is time-starved and desires convenience. But what if these food items were actually a means to portion control because this consumer is embarking on a new diet? You would craft a very different message to show you understand.
To help categorize the why, we start with the basic drivers of human behavior, as borrowed from Paul Lawrence’s excellent book, Driven: How Human Nature Shapes Our Choices. We evaluate how our brand delivers against these drivers. This understanding helps us craft brand communications, which connect with the core consumer.
Status. The first driver is the underlying drive to acquire objects and experiences that improve our status. Most often we think about how our brand elevates a consumer’s external social status. However, our consumer may be more inwardly focused, and trying to improve his health status, for example.
Are you a Mac or PC person? If you are a Mac person, you are probably eager to be the first to acquire the latest and greatest Apple product, even if that means braving long lines. This experience adds to the allure and your status. Do you play videogames casually or are you a gamer? To get gamers on board with a new product launch, both manufacturers and retailers work together to create exclusive experiences, early access, and value-added bundles.
Look no further than the launch of a much anticipated title like Call of Duty Black Ops to see a great example of how the brand and retailers worked together to build anticipation and engagement with targeted pre-sell communications, midnight madness events, and retail extensions with custom and differentiated content by retailer.
Brands that seek to understand us gain our trust and loyalty. Jamie Nordstrom’s keynote address at Shop.org exemplified how consumer-centric strategies drive Nordstrom’s success. Each year, improving customer service is Nordstrom’s number-one goal, as it drives increased revenue. To deliver exceptional customer service, the retailer leaves decisions to those closest to the customer, and creates seamless and customized online and in-store experiences which focus on customer preferences.
Community. The second driver is the need to bond with other people and groups who are most like us. Researchers at the University of California studied the interaction between couples and found that the intimacy of the relationship could be determined by how closely the couples matched and mirrored each other’s behaviors. This same behavior extends into decision-making; consumers look for that commonality.
We might create commonality among health-conscious consumers by sharing stories of others like them who gained control of their eating habits with our brand and inviting them to join our community. Now we are addressing two key drivers.
Some brands are exceptional at creating communities. My husband bought a MINI Cooper years ago, which gave him not only the car he wanted but also made him a part of an exclusive fraternity of MINI owners who receive special mailings, have access to special events such as MINI road rallies, picnics, and drive-in movies. They even share a common language of hand signals to communicate with one another.
Today, when we think of community, thoughts go immediately to social networks, which is a great place to start — by listening. Good marketers are good listeners first. Listening online can provide insight into both why and how our consumer engages with our brand. From here we can build more relevant and engaging content in a voice that speaks directly to them. Just as in real life, a “like” is only the beginning of a relationship — it is the communications and actions that follow that determine the final level of intimacy in the relationship.
Understanding. The third driver is our desire to learn and make sense of ourselves and the world around us. As humans, we have an innate sense of curiosity. We are consistently seeking to control and gain mastery over what we do in the hope that our actions and contributions ladder up to something bigger.
We are satisfied by a feeling of understanding — as consumers, we want to understand the why. This knowledge connects with our primal drive. Dyson has built its brand around explaining why its products work better. Dannon took on the delicate task of helping Americans understand probiotics and their benefits. Once we have engaged a health-and-wellness consumer with our brand, we can provide him with educational content on how to further his quest for healthy living.
Online retailers, like Amazon and Netflix, have endeared themselves to their shoppers by translating the consumer’s transaction and personal history into relevant, personalized product communication and recommendations that expand their resources.
Defense. Finally, there is the drive to defend ourselves, our loved ones, our beliefs, and our financial resources. This is a fertile but tricky area for marketers, since consumers can become agitated or belligerent when somebody tries to show them a point-of-view that differs from their current beliefs.
Over the past few years, brands have put more focus on helping consumers conserve their financial resources, but this alone will not drive loyalty. Most loyalty programs today are structured around providing the consumer with financial rewards. In a recent analysis by WSL Strategic Retail, it is clear that this approach has done little to foster real customer loyalty. Stickier reward programs promise more — like wellness and extra care — and provide different incentives based on both the what and why of consumer behavior.
These programs are stickier because they address multiple ways our consumers can defend themselves. In addition to cost savings, they promise to help defend the family’s health, which brings with it a much richer emotional outcome. This has been fertile territory for both OTC brands and the drug chains, which offer both prevention and treatment solutions.
However, as the appeal of this driver is much broader, it can play directly into the food and beverage space, as well. That’s good news for our hypothetical single-serve snack brands, which can address multiple drivers to engage their consumers.
Understanding consumer drivers helps us focus on creating engaging, relevant communications that connect our brands with our consumers on a very basic and primal level. The more drivers we address, the stronger the engagement.
It is crucial to make this connection, because once consumers enter the shopping mode, new drivers emerge. They are now on a mission and we need to make that mission go as smoothly as possible. Shopping takes up our consumer’s time, money and emotions. In an unconscious effort to make things go smoothly, much of this shopping is habitualized and routine.
Brands need to think about how relevant cues simplify decision-making. Brands and retailers that gain loyalty are eliminating shopper decisions, saving them time and money — which is the ultimate shopper reward. This reward reinforces our shopper’s routine and halos trust back over the brand. And as we know, where there is trust there is loyalty.