Apart from the obvious pressures of cost of living increases honing their super-savvy skills, causing them to be satisfied with nothing less than demonstrable value for money, and making them supersensitive to the most subtle of shrinkflation moves. Then, despite the ‘reassurances’ of letter-of-the-law statements on the pack, they prefer to rely on spirit-of-the-law perception in their judgement of brand trustworthiness… Therefore, the fact that the pack copy clearly states that quantity contained therein, the damage to consumer perception (spirit-of-the-law) is caused on opening the pack.
Thus, trust that has taken years to build is dismissed in a careless attempt to disguise a price increase. In other words, the consumer’s confident reliance on the character, ability, strength, expectation, faith, hope, assurance, expectation and certainty or truth of the brand has been compromised…
Consumers like to outsource their thinking and ideally their decision-making. In other words, they prefer to rely on guidance from experts i.e. they effectively delegate their money matters to the banks, their politics to the government, their health to the medics, and legal issues to the lawyers. The past three years have changed all that…
Consumers that have survived Lockdown fallout have learned the hard way that they have to think for themselves, relying on common sense and gut feeling. But critical thinking takes time and effort, and is possibly reserved for ‘more important‘ issues like coping with cost of living pressures, job uncertainty and prioritising spending. ‘Deciding’ which brand is best for them can seem to be easier delegated to a trusted influencer, instead of making a systematic evaluation of alternatives available.
In other words, deciding on a definition of real need, selecting, scoring and ranking the four criteria of Product, Price, Presentation and Place in assessing available options. Having decided on a suitable brand (delivering more than it says on the tin, every time), not having to second-guess every element of the offering, relying on spirit-of-the-law, rather than letter-of-the-law assurances, it becomes progressively easier to stick with the brand until performance drops below expectation, rather than start an entirely new process of re-assessing available options in terms of meeting one’s needs…
A key component of trust in the brand is brand loyalty, a long-term willingness to repeatedly purchase a favoured brand without the need to second-guess the contents of the offering. As you know, the main reason that brand loyalty is so important to profitability is that the relative cost of encouraging the consumer back to the brand decreases with each repeat purchase i.e. persuading a loyal user to buy again is far less expensive that encouraging a new user to try the brand.
Essentially, given the high cost of attracting a consumer to the brand and ensuring adequate trial, the consumer’s first purchase usually represents a loss to the brand owner. A repeat sale to a satisfied customer still requires some inducement, meaning that the second sale is hopefully made at a lower cost, possibly breaking even.
In fact, it is only when a doubly satisfied consumer returns to the brand a third time with minimal or no inducement that profit is made. Thus it is imperative that consumer expectations are managed, met and even exceeded in order that we can hope to optimise a consumer’s lifetime value.
It goes without saying that anything that causes the consumer to feel ‘short-changed’ places this fragile trust in jeopardy and risks delivering a ‘well-trained’ consumer into the arms of a rival… However, the loss of a regular user represents but a small part of the real risk in disappointing a loyal consumer. The real damage is caused when the ‘tell a friend’ process kicks in.
As you know, in brand marketing a consumer’s reaction to brand experience can be fairly predictable. In other words, ‘please me and I will tell one friend, disappoint me and ten friends will hear of my dissatisfaction’. However, with access to social media by an aggrieved savvy consumer, the 1:10 numbers can be multiplied by ten, a hundred or even tens of thousands in the hands of a well-connected influencer-consumer…
As you know, brand loyalty is measured through customer retention, customer lifetime value, and customer satisfaction surveys, but it completes the profit jigsaw by optimising brand equity, the financial value of a brand.
Given that brand equity provides a means of calculating the financial value of a brand, brand equity also helps to justify a brand premium over rivals. It follows that any dilution of brand equity puts the brand at a disadvantage to rivals and reduces its competitive edge in the category. Moreover, when consumers trust a brand and find it relevant, even at a premium price, and even tell a friend, they are surely worth preserving…
Taking the market capitalisation of the firm, minus the value of its tangible assets, leaves us with the value of brand equity. So it can be seen that any dilution of brand equity lessens the value of the company in the market in providing security for borrowing and drives the cost of servicing debt.
Above are most of the reasons to never risk jeopardising the consumer’s trust in a brand. However, these are merely commonsense business reasons for ensuring the survival of the business. The real payoff from building and maintaining consumer trust in our brands comes from our potential ability to optimise one of the most radical developments in consumer persuasion, the emergence of Retail Media.
Whilst traditional media will probably hold on to its ability to build awareness of the brand, Retail Media’s ability to help us to access the brand’s consumer in the aisle, hand in pocket, ready to buy, will ultimately supplant traditional media in terms of effective persuasion of our consumer-shopper, based on a level of first-party data no traditional medium can aspire to… This Retail Media access enables us to encourage a brand-loyal to stick with the brand, discourage a switch to a rival or convert a dithering shopper into a purchaser.
Whilst the timing and accessibility of traditional TV has been driven past sell-by via emerging technology, it is Retail Media’s ability to measure the results of advertising on a Retail Media Network that delivers the knock-out punch…
For decades, advertisers have been using an old cliché to bemoan the fact they knew that 50% of their advertising was wasted, but unfortunately could not tell which half. Retail Media, by tracking a consumer’s behaviour all the way through the buying process and beyond, can now solve that problem.
Moreover, one of Retail Media’s leading advocates in the business will probably be your CFO, able at last to measure the return on investment of the money historically ‘wasted on advertising’…
However, Retail Media raises key issues and questions for the supplier:
- Who owns Retail Media?
- Who owns Trade Investment?
- Advertising execution: Traditional Agency vs Retail Media Agency?
- Who negotiates with the retailer? Sales/Marketing? eComm?
- Who co-ordinates omni-channel messages?
Patently, the incorporation of Retail Media will take some bedding in, but its momentum is already unstoppable. Given the inevitable development of Retail Media, it is clearly imperative that consumer trust in the brand be preserved at all costs.
In other words, instead of having to use some of our traditional media spend to win back a disappointed consumer and re-educate them about the merits of our brand vs. rival offers, spend that could have gone to creating awareness among non-users, we can instead use this media money to better effect in the aisle.
It is all a matter of Trust….
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