Consumers' Newfound Power Is Causing Them to Raise Their Standards
In the quest for market share and mindshare in the 21st century, marketers find themselves in foreign terrain. Customers empowered by social media have taken over the driver's seat and are telling brands where, when and how they want to be interacted with. The question for marketers is whether this newfound power is significantly impacting brand equity.
A new Forrester study shows that the pillars of brand equity have indeed started to crack under the weight of consumers' higher standards. The 2012 North American Brand Performance Study was conducted in February among 1,250 U.S. online adults. We evaluated how brand perception and engagement among 10 global brands is impacting brand preference, referral and pricing power.
On the surface, four classic factors of brand equity appeared intact: credibility, leadership, relevance and uniqueness. But within each pillar, we found that consumers are forming higher standards for brands to live up to.
Credibility. The higher standard for credibility is brand pride. Consumers who are "proud to be associated" with a brand are more likely to recommend that brand. A feeling of personal conviction drives customers to support brands such as Nike and Apple in social media by giving them more favorable ratings and reviews.
Leadership. The higher standard for leadership is a brand's contributions to society. Consumers expect more from corporations. Those who responded that a brand "makes the world a better place" felt a deeper personal attachment to those brands; these included Nike and Target . But it's not just a feel-good story; those consumers are more likely to pay more for those brands.
Relevance.The higher standard for relevance is indispensable value. Brands such as Walmart and McDonalds, which are seen as something "people can't live without," can offset deficiencies that consumers perceive in other forms of brand equity. Consumers were willing to reward those brands by preferring them over all others and strongly recommending them.
Uniqueness. Consumers rewarded brands that "make them feel special," including Starbucks and American Express, and are much more willing to pay a premium for those brands.
The test of a brand is how well it can adjust to the changing world around it. In the 21st century, marketers need a new compass that guides the brand to meet consumers' higher standards. This compass will help marketers follow the brand's "TRUE" north, to become more Trusted, Remarkable, Unmistakable and Essential.
Trusted. Make your operations more transparent and accountable. As our research indicated, when you earn a consumer's trust, he implicitly believes that the brand will do the right thing. But earning trust requires much more than just making a reliable product or communicating proof points. Take Domino's. They changed the course of their brand destination from 30-minute pizza delivery to "honest pizza is better pizza'' by becoming accountable for improving their product, which had been rated second worst in a national taste test .
Remarkable. Disrupt the market in a way that is worthy of conversation. Brands succeed in the 21st century by inspiring people to talk about the brand, verbally or digitally. Women may not naturally talk a lot about their deodorant, but they felt compelled to engage with the remarkable ways that Secret deodorant was helping "empower women to be fearless." That includes an anti-bullying campaign that drove 75,000 teenagers to post apologies to peers on Facebook and the "Let Her Jump" online video that generated over 700,000 views and helped make women's ski jumping an Olympic event in 2014.
Unmistakable. Create one-and-only experiences. In the 21st century, marketers must differentiate their brand experience as much as their identity. American Express creates signature brand experiences that make people feel special, including its "Link, Like, Love" program on Facebook that integrates card-member data with a customer's Facebook profile to offer personalized rewards based on his or her social behavior.
Essential. Become more irreplaceable in the lives of your customers. The ultimate form of relevance is to become indispensable, so that customers feel that they would have to compromise something by replacing your brand. Tesco HomePlus, the brand's South Korean unit, delivered on its mission of creating value to earn loyalty by becoming more essential to busy subway commuters. They created a virtual grocery aisle along the walls of subways, enabling riders to scan items with their smartphones, seamlessly pay through mobile commerce and receive the groceries within 30 minutes of getting home.
The quest for market share and mindshare is a steeper climb in the 21st century. Make sure you are equipped to guide your brand to live up to those higher consumer standards.