Product strategists in many industries (from CPG to consumer electronics to financial services) share a challenge with their marketing colleagues: how to leverage the power of brand. Product strategists have a number of strategic tools in their toolboxes for differentiating their products from competitors’ offerings: features (a different taste, a new technical capability, or a higher interest rate, for instance); channel, price, or brand (or based on some combination of these factors). For the moment, let’s think about brand, because some product strategists design and build their products based largely on the promise implied by their brand name.
Forrester’s new research report– leveraging a multi-year analysis of Consumer Technographics® data – shows that while brand is important, brand loyalty (defined as the propensity to repurchase a brand) has been waning. The new report, entitled “Brand Loyalty Isn’t Enough For Products Anymore,” reveals that:
· Brand loyalty is on the decline. Brand loyalty dropped in the U.S. from 2006 to 2010, our data shows. One reason? The Great Recession. Another? The strength of brands themselves: competing brands in the marketplace entice consumers to try new brands.
We work with a lot of different types of marketers at Forrester, and we always customize the recommendations we deliver to different clients based upon their unique situations and needs. But over the past few years there's one piece of advice I've found myself giving nearly every company I work with: "Hire a listening vendor."
I love listening platforms and the social data they create; it's a powerful source of information that, used correctly, can make marketers and their programs more effective. But not enough marketers are taking advantage of these benefits.
Develop your messaging. If you want to create messages that resonate with your audience, you need to know what they care about. Many of our past Forrester Groundswell Award winners have used private listening communities to craft their marketing messages; increasingly, we're seeing companies use data from public social media to guide their messaging as well.
Source your creative. We know that consumers trust what they hear from other consumers more than any other source of information -- why not use listening platforms to identify positive social content that can be included in campaign creative? I've even seen a UK bank, First Direct, use social sentiment data in an outdoor advertising campaign.
Brand marketers don’t spend much online. It’s been a long-time frustration for me, but it’s undeniably true: According to our most recent interactive marketing forecast, marketers in brand categories spend less than half as much of their marketing budgets online as marketers in direct response categories. Brand marketers also continue to spend a huge portion of their marketing budgets on TV.
I’ll be honest: Five or 10 years ago, this made sense. Although lot of us were shouting from the rooftops back in 2000 about the scale and power of the Internet, the truth is back then its scale and power were relatively limited. The majority of the population still wasn’t online, Internet usage averaged only a few hours per week, and the brand stories we could tell online were constrained by both tiny banner ads (anyone remember "half banners"?) and tiny bandwidth (broadband access, and with it online video and other rich creative, was years away from the mainstream).
In that environment, it made sense that TV was by far marketers’ most important channel for building brand. After all, it offered brand marketers by far the largest media opportunity (more total users, and way more total hours, than any other media channel) and by far the richest brand impact of any platform. Marketers would have had little choice even if they wanted it: 30-second TV spots were the be-all and end-all of how they explained the meaning of the brands, and all other channels — online, radio, print, outdoor, and everything else — were simply a chance to reinforce the messaging in the TV spots.
But the conditions that made TV the de facto heart of our brand messaging no longer exist. Today, interactive marketing is ready to lead your brand campaigns, for four key reasons: