Brand and Consumer

VALUE, VALUES AND LOYALTY: can you demonstrate these to your customers?

Undoubtedly we’ve seen and experienced one of the most extraordinary years when it comes to reputation. Consumers’ expectations have been shattered by company executives, regulators and, of course, our MPs. The result is a seismic shift in the brands that they will trust, and indeed, buy from.

After a decade of heady consumerism, indulgence, impulse purchases and brand-hopping-cost-driven rate tarts, we have seen a return to a more considered buying process. Consumers are not just looking for value for money but also values from the organisations they choose to deal with.

Increased expectations of value, simplicity and substance from brands were already emerging ahead of the recession, but tough economic times and a few shocks have certainly exacerbated their importance.

There is currently a new wave of budget-conscious, yet still relatively wealthy, consumers coming through. Trend forecasters The Future Laboratory worked with the Sunday Times Style magazine recently on a piece identifying the ‘No-Frills Affluents’ (NFAs) and the rise of the neatly named ‘Aldirati’ (see here). For this group there has been a move from conspicuous to conscious consumerism and saving money has become an issue of pride, indeed the make do and mend philosophy now has a certain cache amongst NFAs. Grocers have leapt to answer this trend focusing on their own-brand offers. Just as Aldi have responded to a brand new customer base by revising their marketing away from a ‘discount’ message to ‘value’, upmarket brands like Waitrose have been prompted to retaliate, defending their market share by launching their no-nonsense ‘Essentials’ range – a bold but prudent move which has been welcomed by their customers.

“The trend is towards quality and value for money – an emphasis that will last a good five or six years – and you might expect demand for brands and products built on froth and flash to wane” Richard Perks, retail analyst at Verdict Research

“The trend is towards quality and value for money – an emphasis that will last a good five or six years – and you might expect demand for brands and products built on froth and flash to wane” Richard Perks, retail analyst at Verdict Research

Of course, when they decide to buy something price is a key factor. However, just being the cheapest will not retain customers. The balance is a fine one, too cheap a price could have the opposite effect and devalue the item’s appeal.

The surge in price comparison websites, has of course, enabled consumers to shop around with much greater ease, however, those previously won over on price will either simply surf again for the next best deal or demand more for their loyalty.

Great companies move past the tangible and functional benefits of their product, creating emotional ties that can easily outlast the individual good or service. Customers might initially be interested in the ‘what’, but they will engage with the ‘how’.

Our recent Search for Answers insight research has shown that poor service or a perceived lack of reward will prompt consumers to leave a provider, regardless of price. Indeed even if your organisation’s own relationship with the customer is absolutely faultless, over half of our respondents said they would no longer accept watching new customers benefit from preferential treatment. Furthermore, the latest Insight Report from Experian identifies a huge section of the population who are “radically rethinking how, when and with whom they spend their money” (see link). More than half of consumers have moved to using a different company in the last year because of poor or indifferent service, and almost two-thirds claim to be less loyal to firms now than they were previously.

However, unlocking frustrations for many consumers can be as simple as a company representative asking ‘can I help?’ In the US Comcast, the cable company, has successfully engaged social media, specifically Twitter, to try and identify service complaints that their digital director could address on a case-by-case basis (see link). The interaction has been hailed as a success as they recently saw the greatest improvement of any organisation in the University of Michigan’s American Customer Satisfaction Index.

Evidently not all organisations are resting on their laurels as almost one in five of those in our insight study noticed that the companies they use regularly are already doing more to reward their custom. This demanding consumer society certainly shows no signs of abating and commentators believe the current return to ‘values’ as well as ‘value’ will prevail well after the recession has past. Organisations wanting to grow during this period will harness this trend as an opportunity to stand out from the crowd – listen to your customers and reward them for their loyalty.