WHI T E PAPER
e all know the value of a loyal customer. We also know the 80/20 rule — marketers invest heavily in their most-loyal customers, who in turn drive
The 2011 Brand Keys Loyalty Leaders study confirmed the importance of emotion to foster brand loyalty. According to the study’s director, Robert Passikoff, “loyalty is absolutely driven by emotion, and this year consumers are absolutely looking for emotional connections — more than ever before.” Moreover, according to a recent Boston Consulting Group study over a 10-year period, brands that evoked a stronger emotional response drove greater loyalty, greater volume and higher prices (20 percent to 200 percent higher than less-emotive brands). But there are significant barriers to making emotional connections between brands and consumers. Marketing strategist Jack Trout pointed out in Differentiate or Die that our minds can’t cope with the clutter; we have a pre-wired physiological limitation to processing stimuli, especially in a world with more than a million new web pages joining the internet every day. Ours is a world where most of us have seen more than 140,000 commercials by the time we’re 18 years old. S i r r i c H a r d ’S a n t i c S Sir Richard Branson is among the most prominent proponents of the maxim that emotional connections drive brand commitment. According to Sir Richard, “feelings — and feelings alone — account for the success of the Virgin brand in all of its myriad forms ... everyone likes to have fun and feel part of something bigger than themselves.” Sir Richard is also adept at breaking through the clutter. I had the pleasure of closing Times Square and dropping him off the side of the Bertelsmann building, riding a giant mobile phone, dressed in a nude muscle suit with a phone strategically covering his nether region — all done to launch Virgin Mobile in the United States. His antics have also included driving a tank down
up to 80 percent of their brand’s value.
As a recent Conference Board survey of top CEOs confirms, driving brand loyalty has never been more important. According to the survey, CEOs see brand loyalty ranking first among management concerns. Why? Because, as Frederick F. Reichheld pointed out in The Loyalty Effect, increasing the size of a typical brand’s top-tier customer base by just five percent can drive a 25 percent to 100 percent increase in profit. Increasing a brand’s base of loyal consumers requires brand commitment — the engaged, active selection and re-selection of your brand by consumers. Committed consumers will go out of their way to find your brand. They are less price-sensitive when given the choice between your brand and others. Committed consumers are more likely to try new product extensions and require less investment to induce repurchase, allowing you to focus on acquiring new users. As brand loyalists, they will also advocate and evangelize your brand to others. But how do we create that loyalty? From what pool does brand loyalty spring eternal? Is there a formula to follow in creating the perfect mix of price, product, place, and promotion? What makes someone stay loyal, despite aggressive competitive activity? Being loyal to a certain brand — belonging to that brand family — is grounded in Maslow’s hierarchy. As human beings, we have an innate need to belong and it is emotional connections that fuel that sense of belonging.
THE HuB NOVEMBER/DECEMBER 2011
with expertise in integrating experiential. This program is a combination of relationship marketing and experiential that together develops target consumers into Johnnie Walker loyalists and ultimately brand “passionists. Participants are invited to follow-up events. cycling. • Participatory events: Open to everyone. Candola (a uniquely Canadian gondola building and race contest).Emotional connections stir brand passions and seal consumer loyalties. They reinforce messages through multiple aspects of the marketing mix. Each of these activities builds personality into the Virgin brand. Their activities are designed to promote creating and sharing the fun with others. motor cross. and visually study the various marks of Johnnie Walker scotch. Sir Richard Branson. Air Race World Championships. King of the Rock Street Ball. energy. and it continues to establish the emotional connections necessary to build brand loyalty. action and velocity and it drives this positioning across a wide range of experiential touchpoints designed to impact various segments of its target mix. delivering meaningful brand messages that connect emotionally with their consumers. The room is surrounded by video telling a story of each Johnnie Walker mark and the attendees pass around examples of the oak casts. J o H n n y Wa l k E r ’S J o u r n E y Johnnie Walker’s “Journey of Taste” is another example of a long-running campaign that cuts through clutter with an emotional punch. emotional connections are created. ultra running. each inviting three more friends. One key measure of Red Bull’s community-building prowess: more than 10 million Facebook friends as of this writing. and with it.com. freestyle skiing. skateboarding. and others. skydiving. • Proprietary sponsorships: Red Bull owns a halfdozen professional soccer teams around the world and creates and tours proprietary events like the Crashed Ice. snowboarding. they gather learning through post-event research so they can refine and augment their loyalty-building successes. his famous space rockets and other adventures. and provide value and interest to consumers that motivate their participation and sense of belonging. and accomplishment. charcoal. speed/trick skateboarding. smell. The consistent element across all of Red Bull’s activations is an unbridled passion for speed. Red Bull’s brand idea is all about energy. Red Bull and Johnnie Walker are creating loyalty by personifying their brands and breaking through the clutter. interactive and customer relationship management. and the cycle of brand immersion continues.
Fifth Avenue. The post-event research and follow-up allows the brand to calculate the long-term lifetime value of consumers who have gone through the Johnnie Walker Journey. Activations are too numerous to list. retail and shopper marketing. extreme kayaking). BMX and mountain biking. • A wide range of action and adventure sports events and sponsorships (auto racing. the famous Flugtag flying machine contests. and. G2 USA. cliff diving. surfing. and peet that is used to make the scotch (furthering the sensory experience). experiential marketing. these include soapbox races. 90-minute experience where they taste. The program has been run continually for over 10 years.
NOVEMBER/DECEMBER 2011 THE HuB
. Red Bull runs events across the globe and enjoys a great deal of synergy as video and coverage are captured and shared globally. breaking the hot-air ballooning speed record crossing the Atlantic. driving an amphibious car across the English Channel. He may be reached at bbryen@g2. most important. promotion. A short cocktail reception is followed by a multisensory. n
BRAD BRYEN is executive director.” Target’s consumers are invited to private events and each may bring three friends (which greatly increases an attendee’s likelihood of attending). r E d B u l l’S S y n E r g y Red Bull is another brand that cuts through the clutter and creates an emotional bond. all checking in on Red Bull on a regular basis to see and experience the brand’s live events around the world. wakeboarding. but include: • Sampling and nightlife programs targeting young adults and key influencers in the worlds of music and entertainment.