It is important to understand the habits, the needs, and the elements that would induce your customers to start using your brand regularly rather than just see it as an occasional treat
“The worst form of inequality is to try to make unequal things equal.”
Aristotle (384 BC – 322 BC), Greek writer, philosopher
And to this I would add that the worst form of inequality in marketing is to treat all your customers equally.
Because they are not really equal.
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| Rupin Jayal |
The most obvious fact is that every person who buys your brand does not spend the same amount of money. Some buy at full price; some buy only when there are discounts available. Some people feel delighted at the price that you charge; others grudge paying it. The price and the response of people to it is a very significant differentiator between different types of customers.
Thus, should those willing to pay full price and be the first movers (particularly in the case of fashion and technology brands) for your brand be the most desirable and the most sought after customers? The answer is, it depends on why they choose your brand. If it is just because you happen to be the ‘latest’ then clearly they are not choosing you for your inherent brand values, but because you will best satisfy their need to appear as trendsetters – for now. If another brand comes along with an even more attractive proposition, they will shift with delight. This is particularly so in technology brands. Suddenly, the iPhone becomes the latest phone to have, and other brands that ruled so far begin to lose customers. People graduating from hatchback cars more often than not change to a different brand when moving into saloon cars – a prime reason why many predominantly hatchback automobile brands find it difficult to break into saloon cars, particularly beyond the economy saloon end of the market. When they do, the car has to be loaded with features that preferred brands manage to do without, raising costs and possibly reducing margins.
So sometimes the early adopter is not the most worthwhile prospect on which to build your brand long term. This is a problem that many restaurants face. They become the ‘flavor of the month’ for a while, but fade away as the next one opens and flock to it instead. However, some manage to build a regular clientèle. What do they do? Is it just good luck? Or is it the fact that they cater to a different kind of customer and design their offering to suit their tastes? While the former might be true in some cases, it usually is a rather expensive gamble. Thus, it makes sense to focus on the latter. To do this, it becomes important to understand their habits, what are they seeking, what would induce them to start using your brand regularly rather than just see it as an occasional treat. And equally important is the need to stay current, to decide what to retain, and what to change as you evolve with your customer. Given the way the economic environment can change dramatically, it is also important for the brand to be sensitive to the pulse of their key customers and what they are seeking – is it reassurance, assistance or is it liberation (‘Sensitive Brands,’ www.dare.co.in/columns/rupin-jayal/sensitive-brands.htm)? Doing this ensures that your customer believes she or he is getting good value for the price they pay, and over time this builds their sense of conviction about your brand.
But is it only about price? What about categories where price is a level playing field, monitored by intense competition? When faced by a shelf full of brands clamoring for attention, how does the customer choose? This brings us to the crucial need of understanding why those who choose you regularly do so. And how much of this choice is based on habit, economic considerations, or because of distribution-related forces, versus how much is due to an active choice made for your brand is something that needs careful evaluation. In many categories loyalty is not based on active choice, but on passive factors, with the role of choice being reduced to just a transaction. This is where the issue of attitudinal versus behavioral loyalty comes in. Any robust brand that remains strong over time and the vicissitudes of economic cycles has to have a core base of people who prefer it not because it is the nearest available, the cheapest, or has the maximum features, but because they believe in the core values of the brand.
These are people who deserve to be treated differently and better. This might seem obvious, but, for example, how many mobile companies do you know that actually offer rewards to customers for their loyalty? Occasionally if a customer opts for a particular service, fees may be waived, but that is usually only when some additional service is being added. And it isn’t about financial incentives alone. It actually needs a regular track of customers’ purchase patterns and a follow-up to understand why they have chosen this particular brand. It means much more than loyalty programs, which more often than not are rewards for behavioral loyalty. While that is important, what is needed is to identify the active advocates of the brand and treat them on a different level from people who occasionally choose the brand or choose the brand for passive reasons.
Luxury brands tend to do this fairly well by identifying regular customers and creating events for them. Some of these events (such as branded golf tournaments) become powerful brand properties in themselves. But here again it is important to understand the different kinds of profiles of ‘advocate customers.’ If a person is a long-time credit card customer, instead of just wishing them on their birthday, they could be given a free special holiday designed with their interests in mind, or gift vouchers for the kind of brands they seem to purchase regularly, or a special customized gift like a monogrammed iPod Shuffle. Given the value that these customers deliver, it makes sense to track them separately, and create rewards and recognition that is tailor-made to suit their profile. Similarly, rather than just giving a loyalty bonus, a test drive invitation, or a free service camp, automobile brands could create a special club for customers who not only buy their brand, but also actively advocate it to others. They could be given privileges such as fast-track service or car accessory upgrades, particularly when the car has been owned for a period of time and the ‘new’ excitement has worn off.
Inequality actually is a very big inducement to brand choice, preference, loyalty, and, most importantly, advocacy. Seeing how well regular long-term advocate customers – or ‘brand lovers’ – are treated, says a lot about a brand and how it views its customers. In a market like India’s, the focus and energy is often entirely devoted to getting new customers. Some of it might be diverted to so-called ‘loyal’ customers. Very rarely do brands consciously deliver a highly differentiated experience for those who not only buy it, but actually actively believe in it and even advocate it. This goes beyond regular loyalty programs and member-get-member schemes. What a highly differentiated experience would need to do is first spend time identifying and understanding the real ‘heartland’ of the brand, that is, the people who believe in it, and are not swayed by price or other external circumstances. The next step would be to create a carefully customized and differentiated experience for these very precious customers so as to deepen conviction and reinforce the mind space the brand occupies for these people.
A brand’s heartland deserves to be treated equally well. It needs to be differentiated from the ‘rest’ and needs to be singled out for recognition. Otherwise advocacy can turn into adversity for the brand, as former advocates become its most bitter and, worse, most knowledgeable and hence credible, critics.
The author is Director-Strategic Planning at M&C Saatchi.
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