This article was published by MarTech Advisor and curated by Closer Spot. Be sure to check out other Closer Spot news and advice to help you win more business.
Brand loyalty isn’t what it used to be. The established retail and media giants of previous decades are dying, and the average life expectancy of Fortune 500 companies decreases every year. Today’s consumer markets are dominated by big technology businesses like Amazon. This isn’t just because retail has shifted to the digital world in fact, most consumers still prefer to make purchases in-store. In the war for brand loyalty, customers are now compelled by competitive pricing, personalized experiences, and friction-free purchasing over a familiar name and logo.
To survive, companies must immediately embrace both shifting consumer expectations and competition from the corporations that have already built platforms to harness data and personalize experiences. Companies can embrace this paradigm shift in three key ways: go direct to their customers, adopt a subscription business model or mindset, and mine their customer data for better insights and more relevant engagement.
Go direct to consumers
Marketing doesn’t have to be a guessing game anymore. In a world where customer engagement is necessary to educate and attract customers, awareness marketing isn’t as effective as in-channel ads and in-platform ads . You can now target individuals, and see the direct outcome of marketing spend. Companies like Procter & Gamble are cutting their advertising spend by billions of dollars, preferring to plan better promotions around behavioral data over “attitudinal data.” Without the additional layer of a retailer or media company running interference between the consumer and your company, brands can migrate from guessing about their customers to gathering their data. With this data, they can build more compelling, personalized experiences across channels, including product recommendations, more timely engagement on abandoned carts, and other action based on behavior-driven cues.
Shifts in consumer expectations aren’t just happening in retail. From consumer packaged goods like razors to television networks, successful companies are moving toward subscription business models. Disney recently launched their direct-to-consumer subscription service so they could fully own their brand’s relationship with the consumer. A one-off transaction won’t give your company insight about the customer or their journey with your brand . Ongoing, meaningful engagement with customers builds a much stickier relationship-and gives you access to a gold mine of data on their preferences and behavior. In a world where consumers are better-educated than ever (with comparisons of prices, customer reviews, and product specs just a click away), meaningful experiences are a key differentiator. And with the cost of customer acquisition at an all-time high, building a relationship around relevant engagement for customer retention is more important than ever.
Go personal and omnichannel
Have you ever made a large purchase like a mattress or expensive coat only to be followed around the internet with ads for the very same big-ticket item you’ve just purchased? This is a failure of the brand to connect actual purchase data with advertising systems. Connecting consumers’ purchase history to their current stage in the customer journey is something even great digital brands are still struggling with . This doesn’t just apply to consumer brands, either B2B customers want to experience the same level of personalization they’d expect when researching and buying a coat. All companies should be tracking their customers, and building profiles of their historical interactions to improve real-time engagement.
Companies that can use customer data to offer more relevant experiences will have a clear advantage in the coming world. Companies like Amazon and Netflix excel at product recommendations. Using engagement behavior, they offer up related items or similar shows based on customers’ indicated preferences. This poses a complicated technology challenge, however. Even large, established digital companies grapple with using data to make sense of the customer journey, and connecting those insights to real-time actions. The companies who will really win are those who can connect customer engagement data from all their channels and act on it in real-time, across systems.
Bonus: Go “phygital”
It used to look like digital companies would win by default but there are certain market segments you can’t win by being digital-only. Adding to the pressure, customers can now come to your store armed with as much knowledge about your products and competitors than employees. To create a truly relevant in-store experience, companies will need to connect physical and digital data for seamless experiences , and make sure their employees have both product knowledge and access to profile data about their customers.
Digital-first brands like Warby Parker and Bonobos have both used showrooms to connect with their digital audience in a physical world. Retail giants are catching on, Nordstrom just opened Nordstrom Local, a service-only concept in Los Angeles, to offer a more curated experience and directly connect customers to personal stylists, tailors, and online profiles with Pinterest-style style inspiration boards. A customer can make a try-on appointment, and get clothes fitted by a tailor in the same day.
The brands that can use technology to embrace these changes will win.