Protect Customer Loyalty During and Beyond COVID-19: Part One – The Opportunity and Power of Choice

By: Tiama Hanson-Drury
EVP, Product Development
Prior to COVID-19, brands were facing a world where customer choice ruled. Due to the proliferation of new brands across most major markets and increased accessibility to global brands, customer loyalty could not be taken for granted. COVID-19 has accelerated this challenge, with consumer buying habits forcibly upended, and a host of challenger brands seeking to disintermediate this new path to purchase. Further, many consumers have more time on their hands and are using that free time to try new products and services. Both factors put customer disloyalty as a chief concern for brands.
Research shows this isn’t a trial phenomenon. According to the Social Media Link COVID-19 Brand Sentiment Navigator, 48% of consumers surveyed said they’d continue to use the new brands they’ve discovered. That is additive to an existing trend which the Data and Marketing Association had described prior to COVID-19, recording that six in 10 customers have switched brands in the past year.
So how does a brand respond? According to most industry recommendations, staying close to your customer and prospects is critical. Forrester Research suggests consumers are still expecting new, exciting things to fill the time freed up by social distancing and are ready to be messaged to.
Beyond getting the messaging right, as we shared in our Global Consumer Trends COVID-19 Edition: Advertising in the New Normal report, social actions resonate with audiences as well. Our research demonstrates that the combination of both will position you in a more positive light, increasing consumer loyalty and guard against brand switching.
Brand-switching occurs for several reasons, but the overarching theme is the propensity to target consumers in unique and different ways. The Coronavirus pandemic has accelerated this risk greatly.
Even more so now, your customers are most likely to switch to competing brands that implement one of these marketing strategies:
1. Leverage consumer trends to re-image the target audience’s need, or uses, for an established category
By way of example, here are two instances that demonstrate how consumer trends can help target consumers and draw them to a new brand.
Pre-pandemic, consider Fever Tree vs. Schweppes. In this case, Schweppes neglected consumer trends pointing to a growing desire for better-tasting tonic water that used more natural ingredients. In doing so, they dismissed competitors, like Fever Tree, that prioritized these factors and established a niche in the market. Consumers within the target market began to view tonic water as a premium with better ingredients compared to a mass-market label. Fever Tree also implemented innovative marketing strategies, including pop-up bars, interactive taste-testing events and selling on-trade and off-trade to appeal to the mass market. In doing so, they overtook Schweppes and now boast a stronger market share.
During the pandemic, a great example is Pomchies. For nearly 20 years, Pomchies has made fashion headbands and scrunchies. As the pandemic took hold, Pomchies recognized a shift in consumer desires for affordable non-medical masks, and introduced new products to meet this need. They have creatively reimagined their customer’s need to accessorize and personalize their appearance for the COVID-19 era.
2. Offer e-com and focus on direct-to-consumer (DTC) relationships:
Pre COVID-19, DTC relationships were already on the rise and a risk to established brands. Take, for example, Glossier vs. Sephora or Ulta Beauty. Glossier was able to deposition their retail competition by employing a direct-to-consumer supply chain. Most of these DTC brands claim to add value by providing high-end quality without the mark-up of traditional retailers. Many also implement new types of branding to attract younger consumers, including influencer campaigns, a strong social media presence, and clean e-commerce websites. DTC has continued to rise in popularity and become part of the new COVID-19 normal for retail, with even established brands like Pepsi and Kraft Heinz joining the DTC game.
3. Rethinking the market from outside the traditional category
Before COVID-19, challenger brand White Claw ate into wine and beer sales by focusing on non-traditional product attributes for the alcohol industry. In 2019, hard seltzer sales surged, while beer, hard cider, and wine margins declined. Why? White Claw marketed to consumer desires for alcohol refreshment options with lower calories and better flavors. By tailoring products and marketing strategies to consumer trends around health and wellness, White Claw (and other “spiked” seltzer offerings) was able to penetrate a seemingly crowded and saturated marketplace from outside the traditional beer/wine category.
During COVID-19 there is no better example than Zoom, who reported that daily meeting participants had exceeded 300 million vs. 10 million in December. This despite the presence of multiple, consumer-oriented video communication and collaboration tools. A large part of Zoom’s success has come from offering the product to a wider population than their original knowledge workers segments. Who hasn’t taken part in a Zoom happy hour, birthday party or yoga class?
Protecting your customers and effectively reaching prospects during this time requires marketers to stay in tune with consumer trends, collecting deeper insights about their target audiences and leveraging a platform that connect current customer data with prospect data, and make those insights and custom audiences actionable. These strategies help sharpen targeting and improve customer experience to protect customer loyalty during our new normal, while also ensuring you reach new prospects.
Be sure to visit our blog on Thursday for part two of this article, where we will explore how to activate these opinions and trends for impact and insightful campaigns.