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| Beyond the brand Rob Denton, Managing Director, Navigator Customer Management |
By:
Jo-Rosie Haffenden |
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Consumers are not stupid. They enjoy differentiation and real value. Promotional activity that involves distinctiveness is the best strategy for brand owners to compete with flourishing retailer brands. So how do you build a whole brand experience?
Introducing a brand to a group of consumers, and developing a recognisable identity surrounding a name or logo is the main task of any brand advertising but this is not the same as creating and fostering a ‘brand experience’. That comes down to how someone is treated over the phone, face-to-face or online. Creating a brand experience brings a brand to life and cements the reputation of a brand. Any ‘touch’ of a brand is part of the experience. Many big name products are not better than the average, but the experience that is associated with the brand is reliable and uncommonly effective. I mean who goes to Starbucks for the coffee?
Retailer brands are becoming stronger and stronger and as the power balance continues to shift toward retailers at the expense of the brand owner, marketers face difficult times. This is particularly true in the Fast Moving Consumer Goods (FMCG) market which provides day-to-day goods to needy consumers. The consumer is undoubtedly the decisive ally in the future success of both retailers and brand owners, however, as manufacturers will never be able to achieve the same scale of power as retailers, the only way they can build their presence is by having consumers demanding for their brands to be on the shelf.
In the quest to win an ever-larger share of the consumer wallet, marketers have traditionally looked toward advertising as a solution. Product branding is a well-established tool in the promotional toolbox, and particularly important for low involvement categories, such as FMCG markets. However, this remains a blunt promotional tool and lacks any sort of ‘touch’ for the consumer.
With the increasing saturation of advertising, brands have looked toward alternative methods to targeting their customers. Direct Marketing is one route that brands use in order to harness, accelerate and prolong their consumers’ immense spending power. It is, however, important to remember that whilst brands have the power to create promotion offshoots for positive effect, it is not always a safe strategy. In 1994, eyebrows were raised in the advertising community when Heinz announced that it was to cut its UK advertising budget and invest heavily in direct mail campaigns aimed at the end users of its products. The company had become only too aware of the power of the major retailers who had developed their own-brand ranges in direct competition with those of Heinz. Heinz beans were twice the price, and despite being twice the quality with a great brand identity, for a product where the quality isn’t a priority of the consumer, sorely lacked a competitive price. Critics doubted that it was realistic to sell a low value product by direct mail. Would it be cost effective? Would the direct mail campaign undermine Heinz’s price competitiveness against other own brand products? It became clear when Heinz abolished their direct marketing efforts, that the experiment was not the wonderful opportunity for profiling and targeting customer individually as was originally envisaged.
As the Heinz case study proves, there is still a role for above-the-line mass media advertising, particularly for low value products, where there is no distinct single customer. When the annual sales value of a customer is comparatively low, to target them all individually does not make sense. The cost, in terms of price, time and hassle is ridiculously high and is not justified by the return on the product the consumer gets in return.
It is in these cases that data-driven marketing can be put in place. They deliver the same level of segmentation and should be of more value to marketers. Data-driven marketing ushers retailers and brands into a new marketing era where best practice organisations are adopting highly customer-centric approaches (as opposed to product-centric) to their entire business model. Developing these customer-centric approaches enables businesses to base their decisions not upon assumptions but upon actual information gathered about their customers’ behaviour, motivations and preferences.
Highly customer-centric industry sectors, such as FMCGs, with significant breadth and depth of available customer data have been shown to be the most able to populate new markets successfully. This is because customer data frees creativity. In the absence of preconceived notions about how and where the brand extension should be directed; the behaviours, preferences and feedback of customers themselves help shape corporate growth.
Marketers need to not only analyse customer spend by product, but across the whole product/service range in order to manage revenue effectively. Customer centricity of this kind enables businesses to think not only about product profitability but also about customer profitability. This aids the development of brand extensions, designed to appeal to their best customers. The most profitable or potentially profitable customers can inform the route of any brand extension strategy. This dramatically increases the odds of success.
So don’t just develop a brand or a brand identity – it is the experience or ‘touch’ of a product or service that encourages customers to commit to a brand and stay loyal. |
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