Need for micro focus

14619649315_015183f6c4_k

The demise of brand loyalty is a well documented fact. The gradual erosion of commitment to brands is an increasing challenge for marketers. Strangely the demise of loyalty is not associated with an increase in repertoire for high frequency of consumption items. Repertoire sizes are actually shrinking as consumers become more discerning.

How do we explain this strange conundrum between declining brand loyalty and repertoire sizes? Consumers are increasingly trying less and are switching between brands as their definition of loyalty changes.

So how has loyalty changed over time? Loyalty now has a new definition and it goes beyond the standard metrics of repeat buying and ‘most often’ bought. These metrics are now slowly getting consigned to the ever expanding metrics graveyard. So if loyalty is now not anymore about how many times you buy a brand, then what is it about?

Brand loyalty is increasingly becoming ‘occasion specific’. Occasions are defined by experience, relevance, context, social and communal norms and the influence of cohorts.

Let’s try to flesh out these factors a bit more. I drink a Starbucks coffee in the morning but for my late afternoon coffee I go to a Harris + Hoole (because I find their coffee more artisan). I have breakfast at home but when I need to pick up an early morning perk up, I head to Leon. For my lunch, I swivel around 4 different brands that offer lunch choices. If I want to have a coffee with a client I prefer to go to an upmarket bistro. So what does my above behaviour tell brands about me?

It does initially indicate that I have no brand loyalty at all in terms of where I buy my coffee from and the places I go to eat. On closer look it does reveal that I have occasion specific brand loyalty. The fact that I have a plethora of loyalty cards in my wallet that I use validates this behaviour.

The definition of loyalty has moved from being unidimensional to a multifaceted one. Consumers are searching for brands that fit with specific occasion needs. The plethora of choices has aided this behaviour. No brand can claim to have a universal ownership of a set of needs anymore.

Consider the example of insurance products. It is still quite a traditional category in terms of how insurance is sold. But it is not immune to the winds of change. Price comparison websites have fuelled the shopping around behaviour. People now have different insurance providers for different forms of insurance. This has also enabled niche providers to gain a feet in the market. The ease of buying insurance online has also enabled consumers to shop around more and for longer. On a similar line, we are all aware of the ‘showrooming’ and ‘reverse showrooming’ trends that have disrupted the business models of fashion and apparel retailers.

Even the most high end luxury retailers are now offering consumers an online experience for their products before luring them to their stores. Hermes, the ultra luxury retailer, recently launched a game changing online experience that allows men to receive online recommendations on how to mix and match Hermes apparel and accessories.

Le MANifeste d’Hermes is your virtual online master tailor and outfitter: http://manifeste.hermes.com/en_WW/

The emergence of occasion specific needs have made brand loyalty a very challenging metric for marketers to manage. With increasing levels of private equity ownership, cross-country holdings, investor activism and shareholder pressure, showing profitable growth of brands has become a critical performance metric for company boards.

But there are solutions and strategies that marketers can look at adopting to address this challenge. In marketing parlance, winning against these micro needs is the key to strengthening brand loyalty. So how should brands win in this new world order?

Expanding the sphere of influence: Brands increasingly need to widen their sphere of influence in consumers’ lives. The ability to effectively position a brand as a multiple solution provider is key. For niche brands it is extremely challenging as it means venturing into unforeseen territories that can damage brand equity. For more mainstream brands, an effective strategy to adopt is storytelling. Storytelling is about infusing a brand into a consumer’s way of life rather than focusing on solving specific problems.

Take for example Dulux’s strategy of positioning colour as a way of life. This was about elevating a brand associated with house painting and mundane tasks to an elevated creative positioning. Colour suddenly became a social and communal characteristic and painting became a creative exploration around making our lives richer. The ‘Lets Colour’ project has revitalised and refreshed the Dulux brand. It has also allowed Dulux to tap into growth opportunities that lie outside the traditional residential and commercial painting segments.

Widening your target base: Nike’s marketing spend has crossed more than 25 million dollars as it expanded its target base to focus on women.

To create a sense of belonging and relevance around its marketing efforts for women, Nike has created the ‘Margot vs. Lily’ video series in its NikeWomen subscription channel on YouTube. The series aims to create a story in which Nike is entrenched. The subscription channel also has country specific sub-channels that aims to create a sense of community among women in those countries.

How does Nike tap into micro needs? In many ways, the strategy that Nike has adopted to be relevant across an individual’s fitness and sporting needs is a great success story.

If we look at the Nike and Nike+ brand, the range of products cater to a comprehensive set of needs within a fitness and lifestyle ecosystem. The men’s and women’s shoe and clothing ranges covers a comprehensive set of sports and associated apparel needs. The Nike+ brand through the FuelBand monitor, the Fuel App, the Running App and the training program provides the connectivity needed for monitoring of fitness regimes, goal attainment and sharing. I am not a runner, but if I do decide to start running one day, I can go to Nike and buy everything that I need to embark on running. By being able to cater to each and every need that an individual has around a fitness activity or a sport, Nike has widened its target base. Nike’s range of products for women is now as extensive as that of men’s.

Being there as a viable alternative: In many instances, winning at a micro moment requires just being there. When I want to buy a coffee in a hurry, I go to the nearest place available, which happens to be a Cafe Nero. So Cafe Nero has now gained loyalty in my coffee-drinking occasions where the micro need is convenience and easy availability (the fact that I find Cafe Nero’s coffee quality to be good is a hygiene factor).

Procter & Gamble famously coined “First Moment of Truth (FMOT)”. According to P&G, FMOT happens in a 3-7 second period in the minds of the shopper after he/she encounters a product on a supermarket shelf. According to P&G, these 3-7 seconds is when marketers have the best chance of converting the consumer into a buyer of their brand by appealing to his / her senses, values and emotions. The FMOT principle is specifically valid during occasions when our purchase decisions are rushed, unplanned, driven by impulse or when we are looking at getting our hands on the first thing we can buy. This is the obvious reason why confectionaries and chocolates are displayed very near or right at the checkout tills in supermarkets.

The aspect of being “viable” is more important than being an “alternative”. In our most rushed and stressed decision-making scenarios, we will not compromise on quality. Ever went through last minute purchase decisions for birthday parties that your children attend? Or the fact that you needed to book hotels for a last minute business trip? Or the fact that you wanted to give a gift to your significant other and left it till the last minute (we men are always guilty of that)? In all of these rushed decisions, whatever we ended by buying was either driven by our own perceptions about brands or in its absence, recommendations. When my wife and I want to try out a new restaurant, we decide based on published reviews or from in-person experiences among our cohort.

Occasion-specific loyalty is going to get more fragmented over time. The fact that our attention spans are declining and there is proliferation of options is increasingly making it difficult for us to finalise our choices. But if brands stay close to occasions and really understand needs associated with them, it will elevate the brand’s relevance in a consumers’ life. Extending the sphere of influence is all about widening the platform of relevance in today’s complex world. For brands to win today, having a strategic positioning is important, but more importantly, it is the ability to flex that positioning across occasions.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s