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SIX MYTHS

BUILDING A LINE TO CONSUMERS


Consumers are more open to trying new brands and retailers than ever before. Fifty-four per cent of consumers globally say they are more likely to try new brands than they were five years ago, and 30-40% engage in recessionary behaviour (e.g., searching for deals and using coupons). These kinds of behaviour are being enabled by digital technologies, such as online price comparisons, mobile search and social buying, which give consumers easier access to choice and information. To retain consumer attention despite all these distractions, many brands seek to engage consumers (via relationship building, frequent interactions and attention-grabbing ads, etc.). However, evidence on the impact of engagement strategies is mixed. Drawing on more than 150 marketer interviews and over 7,000 consumer surveys (in the US, UK and Asia-Pacific), Corporate Executive Board (CEB) explored what brands can do to boost consumer stickiness: purchase intent for a brand, follow through on that intent, and repurchase/recommendation. A Mint-CEB initiative on exploring management trends.

Reality Facts Action steps

Consumers follow the funnel purchase path, i.e., start with a large consideration set and progressively winnow down to one brand
CEBs programme MLC* surveyed 4,361 consumers on their purchase behaviouronly 33% followed the funnel approach, 32%, spindle, and 35%, tunnel.

MYTH

MYTH

Long-term brand affinity is the biggest driver of stickiness


In-the-moment purchase-path factors account for 66% of stickiness, while long-term brand affinity accounts for just 34%.

The funnel purchase model no longer represents the typical purchase path. In todays world of distractions, consumers are just as likely to use either a spindle modelthat is, continue to add options throughout the purchase processor a tunnel modelthat is, opt out of research altogether and buy the first brand they think of.

A consumers most recent brand experience drives stickiness more than long-term brand affinity. Brand affinity is the second biggest driver of consumer stickiness.

Purchase-path drivers of stickiness


Long-term brand affinity 34%

Frequency of purchase paths


Funnels 33% of purchases Im open to anything Spindles 32% of purchases Im open to anything I add more options I narrow things down I buy it
n = 4,361

Decision simplicity is the most important driver of stickiness

Tunnels 35% of purchases I know what I want I find it In-themoment purchase path 46% 66% 20% Involvement in the purchase process I buy it
n = 1,200

I change my mind three or four times I buy it

Decision simplicity
Ease of learning Ease of trusting information Ease of weighing options

Enthusiasm for purchase Perceived importance/urgency Perceived relevance to identity

*Marketing Leadership Council, or MLC, is Corporate Executive Board's flagship programme for heads of marketing.

To encourage more tunnel purchases, marketers should a) help consumers find peer validation, b) drive urgency around the purchase, and c) make it easier to buy through whichever channels consumers prefer.

Ensure shopper marketing (understanding and supporting purchase decision making) is not neglected in favour of consumer marketing (brand building). Work towards making the purchase simpler for consumers. Consumers are overloaded with Information and are confused about their purchase decisions. A marketers job is to help simplify this decision making and not merely boost brand affinity.

Engaging consumers inoculates them against distractionsfor example, cheaper options


The impact of decision simplicity on stickiness is almost four times stronger than that of engagement.

MYTH

MYTH

Frequent interactions with consumers help build relationships and boost stickiness
64% of brand relationships are based on shared values, while just 13% are based on interactions. Frequent interactions with consumers (e.g., via Facebook, Twitter, newsletters) have no significant impact on stickiness.

For todays information-overloaded consumer, purchase decision simplicity has a bigger impact on driving stickiness than engagement.

Impact on stickiness of selected drivers


Likelihood of sticking (percentage increase) A 20% increase in decision simplicity almost doubles consumer stickiness (it causes a 96% increase), while a similar increase in engagement only boosts stickiness by 23%

Consumers form relationships with brands as a result of shared values, not frequent interactions. More interactions do not mean more stickiness. In fact, frequent interactions can actually annoy consumers. One recent study* even found that contacting consumers more than once a day actually lowers engagement on Facebook.

Impact of frequent interactions on stickiness


Decision simplicity Likelihood of sticking Engagement Interactions have no impact on stickness

Why do you feel you have a relationship with a brand?


64%

13%

11%

11% Have loyalty card

1
n = 1,200

3 Strength of drivers

Never

To boost stickiness, focus less on engagement and more on simplifying consumer purchase decisions. Consumer engagement is about increasing the time and attention that consumers give to a brand. These interactions typically focus on brand-specific information and do not necessarily convey why consumers should prefer that particular brand. Purchase decision simplicity is about simplifying the complex choice a consumer faces before making a purchase. To simplify decisions, leading brands help consumers learn about products, trust the information they receive, and weigh the options.

Less Monthly Weekly than once a month Interaction frequency

Daily

Have Receive Agree messages spoken with what it from them to store staff stands for

*Michael Scissons, Four Things Mark Zuckerberg Should Tell Every CMO, Advertising Age, 18 August.
n = 1,200

Companies should focus on building relationships rather than increasing frequency of interactions with consumers. Relationships are built on shared values, not frequent interactions.

To simplify consumer decisions, consumer recommendations, consistent messaging and buying guides are good enough
Research suggests that consumers like to be in control and look for brand-specific information from trusted sources. Todays consumers are aware and like to make an informed choice.

MYTH

MYTH

Relationships can make brand-neutral consumers develop more affinity


Of those surveyed, only consumers with very strong brand affinity reported a brand relationship.

For each of the tactics above, there is an option that consumers trust more. Those making recommendations only help build trust, whereas advisers simplify trust, research and comparison. Messages that are relevant to the decision stage the consumer is in help simplify learning. Buying guides that also speak about the why behind the recommendations further help in building trust.

Brand affinity is a prerequisite for a relationship. In the absence of any brand affinity, the consumer is unlikely to be receptive to any relationship-building activity.

Percentage of consumers who like a brand and/or have a relationship


Like the brand and have a relationship

23%

Dont actively like the brand and not open to a relationship

33%

Like the brand but have no relationship


n = 393 Source: Consumer Stickiness Survey 2011, CEB

44%

Brands must help consumers trust the information they receive, learn effectively without distraction, and weigh alternatives confidently. Typically, companies are good at one of the three elements. It is hard for them to be good at all three. However, all three are important for a brand to successfully help the consumer navigate through his/her purchase decision.

Brand affinity is built by reaching the subconscious without seeking the consumers active attention through attention-grabbing ads. Some of the ways to do this are: a) embed your brand in untapped or switchable consumer routines, b) identify and attach to their passions, and c) identify/activate craving triggers.

Source: Consumer Stickiness Survey 2011, CEB

Illustrations by Shyamal Banerjee; graphics by Ahmed Raza Khan/Mint

The Six Myths series compiled by business advisory firm Corporate Executive Board Co. (www.exbd.co.in) challenges conventional wisdom on how to address critical management priorities. Send your comments to feedback@livemint.com