5 major changes in consumer-brand relationships
The advent of social media and the diffusion of digital technology have created significant changes in the way consumer-brand relationships are conceived, both by consumers and by companies. This pst discusses some of the major factors that have contributed to this evolution.
1. Personal vs. public conversations
A few decades ago, interactions between consumers and companies were rare and occurred almost entirely in a one-to-one manner. Consumers had few available options for retrieving information from a company as communication channels were limited; they could perhaps contact a call center, drive to a store, and, more recently, write an email. Interactions between companies (or intermediaries) and consumers were usually private.
Some recurring issues might have cost companies a lot of money as they needed to be addressed to different customers over and over again. Also, badly handled interactions would have had limited consequences for a company, as the fact could have been directly reported only to a small number of people. Nowadays, consumers have been empowered by technology and play an active role in conversations that increasingly take place on public platforms where everyone can form an opinion on the reported facts.
A company’s social skills and its ability to detect consumer’s needs and provide solutions can be evaluated by everyone. Soft skills are increasingly important, not only for the community manager, usually the brand’s interface with consumers, but for any marketing professional. In particular, they are required to master both the technical skills needed to properly utilize the vast array of social tools, but also soft skills, which are needed to effectively build solid relationships through these social tools (Smith, 2011).
Today, users can express their dissatisfaction online and their conversations can be easily shared, sometimes even going “viral”.
This extraordinary shift toward public brand-related conversations has forced companies to establish a presence in one or more social media platforms, regardless of their ability to effectively engage in a conversation.
However, the opportunity for a user to show appreciation for a brand is significantly higher today than it was previously, if the company approaches all interactions as a way to show conversational leadership, demonstrating its commitment to the relationship.
2. Local vs. global connections
Increased access to brands worldwide has encouraged the rise of global communities. Even small brands can now be distributed anywhere on the planet through e-commerce websites. The ability of brands to reach a global audience is certainly positive for many aspects, but it has also generated new challenges whenever the company is unable to deal with different cultures, values, geographic areas.
Those brands that manage online communities with a global approach and communicate in English on their platforms need to deal with issues such us misleading communications, low engagement from non-native speakers, and the inability to interact in languages other than English. Brands usually have different product line-ups in different countries, which can make it extremely complex to guarantee basic customer service to any online user.
The risk for the brand is to turn the page platform into a well-organized pressroom that avoids “costly” spontaneous interactions due to the obvious complexity of being generated in a global environment.
3. Regular vs. empowered consumers
One of the main objectives for companies in the online environment has been to aggregate groups of fans into communities based into social media platforms like Facebook or Twitter. In 2011, 46 percent of company executives in the United States said that an increase in brand advocates was one of the most important benefits of social media (Jive, 2011). This relational objective is coupled with the need to discover brand advocates and leverage them as a powerful marketing tool to promote product and spread brand communications.
Advocates tell twice as many people about their purchase as non-advocates (Comscore and Yahoo!, 2006). A recent article from Harvard Business Review estimated that a 12 percent increase in brand advocacy, on average, generated a two-fold increase in revenue and growth rate, plus boosts to market share. A company with 100,000 energized brand advocates can reach an average of 60 million people (Bernoff et al., 2010).
It is realistic to believe that any brand has at least one passionate consumer who will ideate, build, distribute, sell, buy, and recommend its products.
There are more than 60 million brand advocates in the US and billions worldwide (Zuberance, 2011). Globally, 80 percent of consumers recommend at least one brand, but the average number of brands that consumers recommended has increased significantly in all regions of the world (GfK Roper, 2006). Despite the proven importance of effectively managing advocates and experts, ONLY 20 percent of brands have implemented programs with such intentions (Marketing Charts, 2013).
4. Dispersed vs. technology-enabled communities
Many authors have pointed out the significant benefits of an active group of consumers. Community is a core part of social thought. People are held together through shared emotions, styles of life, and consumption practices. Community concept is an alternative form of social arrangements, also referred to as “neo-tribes” or “post-modern tribes”, and is not new in brand management studies. Consumers desire an experience-based marketing that emphasizes interactivity, connectivity, and creativity.
This explains why people are often more interested in the social links that come from brand affiliations than they are in the brands themselves. In fact, 25 percent of users choose to engage with brands because they want join the community of brand fans (Technorati Media, 2013). Brand communities are not built on brand reputation, but on members’ understanding of brand stories.
Being communities dynamic, neither fixed or permanent, its meaning and concreteness are always being negotiated by individuals through narratives. Although this is true whether group members interact electronically, via face-to-face communication, or both, we can argue that digital technology enabled the rise of these links between consumers. Consequently, the interaction between brands and consumers has also changed dramatically.
Creating a linking value among consumers in order to establish a sense of community and spur collaboration has become commonplace in the social media environment (Cova, 1997). More than 3.5 billion brand-related conversations take place each day in the US (Keller Fay Group, 2007).
Companies should always have an active role into these conversations, but the members of the community must also be free to interact and collaborate among themselves without any restriction.
5. Spontaneous vs. Data-driven interactions
Some of the relationship barriers that companies face when establishing personal and long-lasting collaborations with strategic customers are a result of the complexity associated with the so-called “Big Data” phenomena.
Companies must increasingly deal with tasks including the following: (1) data gathering – collection of real, systematic and inexpensive data about consumers; (2) data integration – integration of consumer data collected from multiple platforms; (3) data diffusion – distribution to the key people in the organization; (4) data intelligence – usage of data to improve the experience, content, and service delivered during any interaction with consumers; and (5) data update – organizing and polishing the collected data to constantly update user profiles.
As consumers are consciously providing a large amount of personal data to companies through every registration – for example, related to a contest participation – they have increasing expectations on the way brands intelligently handle this information. For instance, if a user calls a customer service for information, he may wish to be automatically gathered as Mr. X. Also, he may expect the operator to know what kind of products he owns as well as the outcome of his previous interactions with the company.
Founder & Creative Director of BrandMate