Recent experience tells us that no brand is Too Big To Fail. The list of once-dominant companies that have fallen by the wayside is long and inglorious. Of course, retail has been hit especially hard, with the likes of Woolworths, Toys R Us, Blockbusters and Debenhams all failing. But the bloodbath can be found everywhere, with even non-retail firms like Chesapeake Energy and Hertz all now bankrupt or in bankruptcy protection.
This trend is not a one-off occurrence, like the dinosaurs dying out. It’s a constant phenomenon. Everyone likes to quote the demise of Kodak – the once dominant film and photo processing company. It died out because it didn’t adapt to the age of digital photography. Okay, we get it. But what people tend not to consider is that the digital camera companies who replaced them subsequently had their own lunches eaten by smartphone makers like Apple and Samsung. It’s a jungle out there and survival of the fittest means constant and often rapid evolution is needed. You don’t want to be the brand that can’t keep up.
CX is King
While technology is an enabler, the real issue is often changing customer preferences – about how they interact with brands and what they expect of them. Marketing and customer experience are now indivisible, and the promise a brand makes through its marketing and advertising had better well be how it feels to the customer when they interact with it, or that brand is toast.
Increasing empathy is a sure-fire way to drive trust in a brand. Trust isn’t just a nice-to-have but has real bottom-line benefits. When consumers trust a brand they are much more (75%) likely to carry on doing business with them, highly likely (82%) to spend more with the brand and almost guaranteed (89%) to spread the word about their positive experiences.
Unfortunately, trust is in short supply everywhere, so brands need to work hard to be authentic. Customers are no longer passive – if brands foul up, they are for it. When mining company Rio Tinto destroyed the 46,000-year-old Aboriginal site known as Jukkan Gorge, there was a national outcry that led to the resignation of Rio’s CEO and chairman and other leading directors. Even carelessness can be hammered, as online clothing firm Boohoo found when its suppliers’ factory workers were forced to work without social distancing, resulting in a local spike in infections of Covid-19. Boohoo was blamed for the failings of its supply chain – wiping a cool £1.5 billion off its market value. As it and Volkswagen (who cheated on emissions outputs for its products), it takes a long time and a lot of marketing effort to rebuild lost trust.
Crises like the global pandemic can be opportunities for increasing trust in a brand. Fast food chain KFC has used the slogan ‘Finger lickin’ good’ for over 60 years. But with hand hygiene in focus like never before, KFC thought its slogan inappropriate, temporarily dropped it and commissioned an ad campaign to highlight the fact. Not only do actions like these show empathy and build trust, they are also good for business. In a US study more than half (52%) of online consumers said they preferred to buy from companies that demonstrably protected them. And not just them, almost a third (32%) said they would prefer to support brands that protected their own employees. Great brands tangibly demonstrate their purpose and values. To meet the changing consumer expectations marketeers need to show more emotional intelligence in marketing and develop better relationship building skills.
Innovation is necessary but not sufficient
We all love novelty, but new ideas alone won’t keep customers loyal. We get excited for a while but its human nature to soon tire of things. Remember how everyone used to wear the foam injected clogs Crocs in the early 2000s, only for them to largely disappear without trace? Or how Fitbit were the (short lived) de rigueur accessory for health-conscious executives?
Apple, that bastion of new ideas and tech, has discovered the Holy Grail of merging continuous innovation with an awesomely consistent customer experience. But that’s not to say we should all be Apple. US department store JC Penny tried to copy the approach, abandoned much loved coupon discounts in favour of fixed pricing and went down a boutique layout route. Fine in theory, but unlike Apple, the products it sells are not unique and could be bought elsewhere, often at lower prices. The company is in Chapter 11 bankruptcy and a third of stores will be closed by the end of the year. The moral of the story is we can’t all be Apple.
Even Apple doesn’t always get it right. When legendary founder Steve Jobs was forced out of the computer company in 1985 the company started a long-term decline. Fast forward 12 years to 1997 and Jobs was brought back as Apple teetered on the verge of bankruptcy. Jobs restarted the process of continually evolving its products and its relationships with customers. For more than a decade Apple has maintained a consistent brand personality. Its core belief system has translated into personality attributes and emotional benefits that reassure customers.
One of the key messages of modern marketing is that no brand is immune, no matter how illustrious its history. Thomas Cook arguably invented the package holiday in 1845 and became the by-word for affordable holidays. ‘Don’t just book it, Thomas Cook it’ was its ad slogan – and for more than a century the company prospered as the middle classes ventured further afield. The internet put a stop to that. When customers started putting their own holidays together online Thomas Cook had no other assets to fall back on (such as planes, hotels or cruise ships), and so quickly went bust.
Do you want empathy with that?
There is a lot that established brands can learn from digitally-savvy start ups. They apply empathy with the customer, encourage customer feedback and build that into their evolving strategy. With everything happening online they have become masters at data analytics and use this information to accurately connect the brand with the customer experience. There is nothing stopping established brands doing likewise, especially as many of these digital natives use software platforms for web, mobile and loyalty that are readily available from vendors such as Abode.
Of course, it’s not quite as easy as that. A unique brand experience still needs to be developed, one that unifies digital, physical and communication moments. At the heart of this is managing customer perceptions, and the most successful brands do this best. Consumers are constantly evaluating a brand’s intentions, commitments and ability to keep its promises – and looking for signs of this at every interaction with the brand. Done well, and coupled with emotional storytelling, this can create a powerful consumer community that creates an almost sacred reputation and clear competitive edge.
As the last 12 months has demonstrated, no brand – however established or revered – is guaranteed survival. To a lesser or greater degree, all brands now need to think and act with digital consumer interaction front of mind. Success will come to those who unlock the secret of building brand and experience hand-in-hand. A poor promise will starve a great experience, while a poor experience will break a great promise. You need both in order for a brand to compete.
In marketing terms it’s still the survival of the fittest.