The problem of scarcity is central to the construct of government, society, and culture. Our most significant evolutionary advancements as a species have been in response to scarcity. Scarcity of food. Of natural resources. Of shelter. It is this fear of scarcity that has compelled brands across industries to resort to abundance. But this abundance, without informed customer insights analysis, is causing brand loyalty to die a slow death!
Technology Has Helped Overcome Scarcity Problems…To Some Extent
Technology has largely solved the most important problems of scarcity. A sustainable energy future today seems less utopian and increasingly inevitable. There is more than enough food to solve worldwide hunger – only bad actors and geopolitics stand in the way. There is more information in your pocket than you could ever expect to access in a lifetime.
In the blink of an evolutionary eye, the problem of scarcity has been supplanted by the plague of abundance. Choices abound. For everything. Amazon has over 600 million SKUs. Who you date is no longer limited to where you go to school or work or who you might run into at the grocery store. Our brains have evolved to seek, but technology demands we choose:
- Not to read a different perspective, but to doom scroll through an inexhaustible supply of algorithm-curated, worldview-reinforcing content.
- Not to listen to music, but to listen to a specific artist perform a specific song.
- Not a chance encounter at the gym, but endless filtering and navigating through a sea of strangers.
But Marketing in this Era of Abundance is Challenging
Marketing’s grail of making “customers for life” seems comically naive amidst this backdrop of abundance. The pursuit of it is a quixotic path littered with pitfalls, short-term thinking, and spent dry-erase markers. Increasing marketing ROI amid such abundance is burdensome.
- Brand loyalty is falling. Post-pandemic, customers are less loyal to brands than ever. The sudden and widespread shift to online commerce, although necessary, also introduced the problem of abundance. With thousands of brands fighting for digital space on hundreds of e-commerce platforms, customers are spoiled for choice. How do brands stand out in this crowded retail space?
- Price consciousness is relative. Price consciousness in today’s era is completely skewed. While customers are price-conscious about some products, they are completely indifferent to others. For instance, customers are increasingly embracing fast fashion because the products are being sold at a fraction of the price of original labels. On the flip side, when it comes to travel, customers are making extravagant bookings at the drop of a hat.
- The cart abandonment rate is rising. Despite all the products that customers can choose from, most carts lie abandoned. According to a recent survey, the abandoned cart rate for desktop purchases is a whopping 70%. For every 100 potential customers, 70 leave without purchasing. Imagine the decrease in revenue for brands due to these lost sales!
- Customer feedback isn’t always reliable. When brands ask customers why they didn’t purchase a product, the price ends up being the most common answer. That isn’t always the case, but customers prefer to say so because that’s the only answer that won’t make them feel dumb. A long checkout process, the compulsion to create an account, or late delivery times are some of the common reasons why customers do not go ahead with a sale.
The Critical Role Customer Insights Analysis Plays
The challenges facing brands in today’s era are growing multifold. While many resort to short-term measures like rewards or loyalty programs, they don’t create brand loyalty. On the contrary, they harm it. Brands end up competing based on the comparative financials of a rewards program, not the experience of the product. In the long run, such tactics erode profit margins, dilute the brand, and turn off their best, most loyal customers.
The most effective loyalty program is understanding what your best customers tell their friends and family about your brand and pouring marketing resources into ensuring that the story is reflected and amplified at every customer touchpoint, analog and digital. And unless these rich insights, derived from thorough customer insights analysis, guide what you do from a product, marketing, sales, service, and operations perspective, your loyalty program is probably just lip service.
Rich customer insights are what can take brand loyalty to the ultimate level. Using insights, brands can better understand what their customers really want. Based on this understanding, they can tailor their marketing campaigns and customize products and services. They can create long-term value by building trust, enabling personalized experiences, and engaging customers more profoundly. The right insights can also drive solid margins for brands and help them grow their share of the customer wallet.
Boost Brand Loyalty With the Right Insights
As businesses struggle to differentiate themselves in the sea of established and emerging companies (and products), the ability to capture and analyze consumer habits delivers tremendous benefits. By identifying, predicting, and addressing factors that influence purchases, brands can better understand customer demographics, craft tailored messaging, and boost brand loyalty and satisfaction.