The marketing landscape has changed exponentially over the last decade as both marketers and consumers have become more sophisticated, technologically adept, price smart and conscious of the impact of having a good reputation.
Technology has reset the value equation across the spectrum of audience engagement. Power has switched from the supply side to the demand side of commerce, disrupting the one-way brand model that focused on winning minds. Technology + creativity is transforming every industry – retail, finance, logistics, manufacturing, energy, transport, food, education – delivering power and wonder to the audience at digital speed.
People have the world at their fingertips and at the command of their voice. Far from being reliant on brands to manage the information tsunami, people know how to get what they want – and fast! Brands that manipulate, under-deliver or over-price get seen through instantly. Contrary to popular thinking that people are overwhelmed by information, consumers are extremely savvy navigators and have no hesitation about consulting reviews, comparing prices and checking social media currency. The consumer cycle is: see it; search it; shop it; share it.
The tech-led empowerment of customers will only grow as the “Internet of Things” connects everything to everyone, driving down the marginal cost of production and distribution, just as technology has done with the supply of information.
Emotional Appeal for Customer Loyalty
In this always-on, impulse-led, instant Age of Now, brands, choices and deals are prolific for brand-fatigued, tech-enabled and “entitled” consumers. Consumers expect more for less, and can switch faster. Brands are under siege, finding it ever harder to command premiums and retain loyalty. Only 23 percent of consumers in a 2012 Corporate Executive Board study said they have a relationship with a brand. Another study showed the majority of people worldwide wouldn’t care if more than 73 percent of brands disappeared tomorrow.
The days when marketers could look forward to the majority of customers coming back to the showroom for a repeat buy are largely gone for most (but not all) brands. According to research in 1980, 80 percent of U.S. auto purchases were made by repeat customers; by 2009 the figure had plummeted to 20 percent (CNW). In an August 2014 study, only three brands – Toyota, Honda and Ford – kept at least 50 percent of their customers coming back on average (Kelley).
Is this the end of brands? Does the march of technology condemn brands to a low-margin battle of attrition? For attention grabbers, yes. Brands still have to be created today, but this is a table stake. The path for marketers wanting to kindle brand power and loyalty has less to do with functional elements such as distribution and advertising, and more to do with emotional fulfillment. Brands have to show truth and engage deep. The have to make the leap from being trusted, liked and admired – to being loved.
Emotional expectations of brands are on the rise. Consumers are asking, “How does this brand improve my life?” and “How do I feel about this brand?” There is a thirst for authentic connections. Passive consumers are being replaced by active brand voters who opt into a brand ethos that meshes emotionally with their own lives.
People want to be involved in the story, whether it’s the middle, end or the beginning. This applies East to West. Chinese consumer spending is expected to grow from $2.03 trillion in 2010 to $6.18 trillion annually in 2020, a threefold jump (Boston Consulting Group). In 2013, a major study of consumer behavior in Tier 1 to 4 cities in China involving 22 product categories found that emotional factors ranked first as a reason to buy for more than half of the categories considered. And another 2013 study about direct marketers looking for ways to tap into a receptive audience of eager television viewers concluded that consumers with a strong emotional connection to a brand are 47 percent more likely to contribute revenue.
Focusing on emotion makes perfect sense. Psychologists like Nobel Economics laureate Daniel Kahneman have shown how people are not rational decision makers. The Canadian neurologist Donald Calne encapsulates this: “The essential difference between emotion and reason is that emotion leads to action while reason leads to conclusions.”
Big Data + Big Emotion = Big Rewards
Emotional fulfillment, not technology, will be the stand-out offering of a winning brand. People like technology – but people mostly really like other people. The more digital life gets, the more people will value being understood, touched and involved by other people. The brands that win will be real and personable – whether it’s a live person on screen, a physical store interaction or the mass intimacy of a stadium event, football to rock.
And Big Data? Is it the new nirvana, the perfect marketing moment? Gartner has said that by 2017 the CMO will spend more on IT than the CIO. Good luck to the new “Chief Metric Officer,” unless she or he is also a “Chief Magic Officer,” because magic will always need to be sprinkled. Big Data needs Big Emotion, because algorithms will never read and respond to humans the way humans do. The Big Data machine can read the lines, but not between them. Relevance is one thing, irresistibility is another. Big Data can turn up at the perfect moment, but not ignite it. It can spit out stories based on what came before, but it can’t dream the difference and feel the empathy that builds billion-dollar loved brands.
Big Data and Big Emotion have to join forces, not fight each other. For example, Saatchi & Saatchi works with Hotspex in Toronto with their heatmap-based Emotional Measurement Technology to find the emotional space a brand will grow in and to get an emotional balance sheet to see strengths, opportunities, weaknesses and paths to avoid. With Protobrand in Boston, we have just developed Lovemarker 2.0, which has identified the eight critical factors that lead to brand respect – for example competence, innovation and social and environmental responsibility – and the seven critical factors that lead to brand love – for example desire, connection, devotion and exclusivity.
Five Keys for Businesses and Brands to Get to the Future
Be a Creative Leader
Cultures that have the most ideas are best placed to win, because creativity has unreasonable power. Ideas have re-framing power, talking power and sharing power.
Old world power, scale and money have been eclipsed by the velocity of ideas. Winning as a brand demands a climate where creativity can thrive, where diversity is standard and where ideas fly in all directions all of the time. There is a dream in full view for everyone to reach for. Creativity and innovation are in everyone’s job description, and the crazies and misfits (especially the loyalists, the fans) get a seat at the decision table. Everyone on the production team gets responsibility, learning, recognition and joy in equal measure. This is the blueprint for Creative Leadership.
The more that brands bring their consumers, customers and partners into their secret garden, the greater the rewards that will flow back in, and the bigger the garden will grow. The new ROI is Return on Involvement, and the fan base is critical. Fans are not usually a numerically significant percentage of a brand’s overall buyers but have outsize impact on building a winning brand. This is about influencers, shared values, inspiring community, word of mouth, creating movements, co-creating and story sharing. To reorder a classic line of the late great Steve Jobs: Amazing. Click. Boom!
More than 50 percent of the cortex, the surface of the brain, is devoted to processing visual information. Images, Instagram and infographics are becoming hot properties in the information-tsunami for good reason. People today are aesthetically adept; they process images thousands of times faster than text, and love to share cool imagery. We are drawn to beauty and universality.
Priceless value arrives on time and whether we’re talking curing killer diseases or simply feeding the kids, there is less time available for people than ever. Across production, distribution and communication, brands have a need for speed. Tom Peters summarizes the way to win: “Test fast, fail fast, adjust fast.”
Emotion is the primary key to winning on the road ahead, and in the technological century, the potential for a brand to deliver on heightened emotional demands is greater than ever. There is extraordinary capacity to understand people, interact, customize, personalize and touch lives.
The irony is that while loyalty was never easier to lose, it has never been easier to win for a brand that is are emotionally-tuned, emotionally-capable and emotionally-executed. The commercial opportunity is not just to drive repeat sales but also to command premiums, build share and extend range.
Brands are becoming human relationships, and the strongest relationships have mystery, sensuality and intimacy, the stuff we care about. The more empathy, magic and love that brands stream out, the more that comes back in a multiplier effect. This is about more than irreplaceability. It is about irresistibility, a brand with Loyalty Beyond Reason – a Lovemark.
A version of this article first appeared on the University of Florida’s College of Journalism & Communications’ blog on Medium.
Kevin Roberts is the New York-based CEO Worldwide of Saatchi & Saatchi – one of the world’s leading creative organizations and part of Publicis Groupe, the world’s third largest communications group. He took up his position as CEO Worldwide with Saatchi & Saatchi in 1997, and will move to the position of Executive Chairman in January 2015. In 2004, he wrote Lovemarks: the Future Beyond Brands, a ground-breaking business book published in 18 languages, showing how emotion can inspire businesses and brands to deliver sustainable value. Lovemarks was named one of the ten Ideas of the Decade by Advertising Age in 2009. He has just published a 10,000 word “Red Paper” Brand Loyalty Reloaded, which can be found at saatchikevin.com.