By Anastasia Lloyd-Wallis
Chief Operating Officer and Head of Consumer Insights, Retail Doctor Group
In this ‘borderless’ retail landscape the importance of understanding how customers interact with brands is critical.
- How do customers want to be treated?
- How do we connect with customers beyond a transaction?
Treating Customers Like People
One of the things that we’ve really seen change is how customers are now being treated like people. How do we create that link with people?
One of the things that retailers seem to struggle with a lot is treating customers like a transaction, like a number. How do we really talk to them as people on a more-emotional level and create a connection?
Brands as Partners
There’s been a lot of change, obviously, in the world over the past 24 months, making it very, very difficult to build loyalty. We suddenly live in a world of borderless retail and customers now have the ability to pick and choose who they engage with. Those options are endless now.
So we could call it a change in customer behaviour, but it’s really more of a continuation of a change in mindset that began during the pandemic – one where customers are looking to partner with brands that accurately represent them, their needs, and their lifestyle and values.
The need for people to partner with brands is particularly prevalent across the younger generations. These youngsters see the brands they associate and partner with as more of an extension of themselves than as just another retail point.
This is why it’s important to these generations to be able to express themselves. The brands they’re partnering with are an important way for them to say, “Hey, I believe in this brand. This is what I believe in, and this is what my brands believe in.”
Funnily enough, when you reflect on the past and go back about a decade, you see that the connection people had with the brands they used was really shallow. Brand sentiment back then was “I like this product because it’s expensive and it looks great on my arm, in my driveway, on my social media account. I like expensive things. That is the only statement I make here.”
We now know that those connections were really shallow, and did not reflect the deeper, much richer and really, truer connections to brands that we’re seeing today. This is where the challenges come in.
Most retailers today are not geared up to deal with or support this change in brand sentiment. The relationship is what’s new here, not the product. It is a two-way relationship, and is an extension and reflection of the consumer themselves. That is why brand matters so much nowadays.
Part of that challenge is the struggle to understand the importance of brand in purchasing behaviours. Retailers – especially those who have been around since before the last decade – have created this ultra-simplistic view of retail, which is that stock goes in the back, you price it up, and out it goes to the shelves or the online store for someone to buy.
The Future of Brands in Retail
The future of retail and of brands looks very different now. Retailers should be investing heavily in brands, programmes, and systems that help facilitate loyalty and drive connection across all touchpoints of the customer journey.
This is a connection that should happen all the time, not just when you’ve spent with us and at that point we can be friends. We’re looking to connect with our customers at every single point.
The future of brands in retail lies in how they are built to connect to all of those touchpoints in the customer journey. It is imperative that you understand how the customer interacts with the brand. By this, we mean not necessarily with the product or during the actual purchase, but how they interact with the brand every step of the way in their purchasing journey.
Pain Points in the Customer Journey
When you look at customer journey or customer experience maps, you realise that pain points are the most important things that an organisation needs to understand across each phase. Pain points are so insular.
Those customer maps are not talking about brands; they’re talking about really functional connections and that’s where things start to go a little bit astray because by design, you’re building a really robotic or disingenuous connection with customers.
If you rewind to every single point in that journey, what’s the pain point that involves your brand? What if your brand is not delivering at each of these points? If you were to look at all of these touchpoints in that journey, you’d have a very different view of the problems that are at play.
Humanising Your Brand
With this in mind, how do you then humanise your brand? Seeing the brand as a person and considering all those interactions again, how would that journey differ? If you were a person interacting with another person, and that was your brand interacting with your customer, would that customer walk away?
Think of it as a two-way conversation. Imagine having a conversation with somebody that had no empathy about you, that just answered in single words. That conversation wouldn’t last for too long.
Brands need to understand your consumers’ personalities, emotions, and the why behind their purchasing decisions, but also brands need to understand why the consumer is shopping at their store, buying their brands, and choosing that lifestyle, in particular.
This is so important when you dig into the expressions of the brand at all these touchpoints. That kind of why.
Shifting Connections and Customer Loyalty
In the past 12 months, we’ve stepped into the future. One of the really interesting consequences of this is how we’ve shifted our mindsets to creating connections with customers before they’ve set foot in a store.
Even before the forced shift caused by the pandemic, this idea of loyalty and of loyalty programmes themselves, was already a bit of a dirty word. This is a trend we’ve seen growing exponentially over the past 2 or 3 years, especially as loyalty programmes and their benefits were really very much just about collecting reusable transactional points.
Consumers are so over needing a minimum dollar balance on a set of cards that collect points so they can turn around and swipe the card at the same retailer, only to spend more. “Clever” retailers think of loyalty as just a way to collect points, a way to force customers to stay loyal by spending their points in-store instead of somewhere else.
“Smart” retailers are thinking about how to use loyalty as a way to add to the brand, to give the brand a voice, and to create a connection with their customer.
Let’s call it for what it is. Most loyalty clubs or schemes are essentially that; they’re a scheme. They’re elaborate spend-and-save schemes. Customers aren’t silly. They see through a lot of this, and the more-and-more people that set up clubs like that.
You’re just going to end up partnering with the person that gives you the biggest discount, which is, essentially, the exact opposite of what you’re trying to achieve when you’re trying to drive a loyal connection. The ability to compare is really not a reason for a deep connection at all. It simply results in yet another really shallow connection.
A lot of the problem with loyalty bringing a bad taste to the mouth begins here. The customer journey has become more-and-more complicated over time, as these countless studies and maps will show. Your customer’s journey is no longer linear. They need loyalty to them, not their loyalty to your brand.
How do you do that?
People deviate between the different phases of their buying journey constantly, but loyalty gets plugged right at the end of the loyalty journey, when they purchase. Essentially, this means we’re telling our customers that we can only be friends with them once their money is spent with us. Customers are smarter than that.
The opportunity is huge to really bring that approach of loyalty throughout every single touchpoint to the table. And the way you do that is to use your brand and what it stands for as the driver of change.
Looking at the Barbeques Galore Legends Club as an example, Retail Doctor Group worked together with Barbeques Galore using consumer insights to develop their award winning loyalty club. Discounts and the likes are the expected rewards, but the focus here is how to grow the connection of the barbeque experience overall. How does Barbeques Galore stand tongs-in-hand next to the customer at the grill?
How can a brand stand apart in a tight niche like that?
It’s quite simple. Give the customer the skills they need to barbeque better. Whether they’ve purchased from your store, or are a competitive brand, you need to be the authority on barbeques, and support your customers in that niche only.
Don’t focus on loyalty points. They have their place in a rewards-based system, for sure, but they are of a static and uninspiring nature. Instead, create a really rich connection with customers by using a dynamic and enriching approach.
It stands to reason that customers will come back for the experience in the future. Connections drive lifetime value and loyalty, not points. Your focus should not be about spend-and-save, nor about points or even discounts. Connections.
The reality is that your customers are engaging with you for whatever reason that has to do with your niche. They share a common interest with you, your brand story, or your products’ usability. To connect with your customer, you need to celebrate that common interest.
In your niche, you may feel that it’s an impossible task, but I guarantee you that it’s not. It just takes a little bit of research and consumer persona development to figure it out properly.
Building Emotional Connections
If you can build an emotional connection with your customers, they’ll walk past the competitors because you’re no longer playing on price anymore. Price does not matter in an emotional connection with your customers. Price is a race to the bottom, and we all want to try to avoid that one.
The ultimate goal is therefore to get them to walk past the competitors to come to you – if you could build that emotional connection.
What Else Do You Need to Consider?
In part two of this series, we look at how customers have changed (especially since the pandemic) and how you keep these customers brand loyal.
If you’re looking to understand “Why” your customers interacts with you and how to use this to drive foot traffic, increase conversions and improve frequency of visitation reach out to me for a complimentary discussion firstname.lastname@example.org