Brands: Stop Selling, Start Building Long-Term Customer Relationships
In the “retailpocalypse” — i.e., the age of mass closings of brick-and-mortar retail stores falling to new online competition — brands live and die by their ability to communicate a strong purpose that resonates with their core customer base. In the absence of abundant sales leads, companies must instead bolster long-term customer relationships.
This is especially crucial right now, as the COVID-19 pandemic has led many marketers to change how they interact with consumers, prioritizing communicating empathy rather than focusing just on sales. Coupled with the reality that shelter-in-place orders have shuttered thousands of traditional retail stores, consumers are migrating en masse to online shopping, generating increased competition between traditional retailers and direct-to-consumer (DTC) brands.
As a result of all this, many businesses are scrambling to snatch as much new business as possible, sometimes at the cost of their existing customer relationships. But with competition for new customers at an all-time high, companies must instead work to retain their existing business. Now is the time to move away from efforts to boost acquisition in order to build a deeper relationship with current customers. However, earning trust isn’t a small task, nor does it happen overnight.
The Importance of Building Brand Affinity Instead of Chasing New Customers
Brand affinity relies on a seller’s ability to make an emotional connection with customers, and is based on the mutual belief that a customer and company share common values. Brand affinity is one of the most valuable customer relationship metrics, so today’s brands need to achieve a balance between fighting for new acquisitions and focusing efforts on retaining customers.
Take Patagonia, for example. The outdoor clothing brand has built a cult following through a sustainable product line that fits into its broader vision and brand narrative — “to save our home planet.” Instead of relying solely on new sales, Patagonia promises quality products, a commitment to environmental issues and combating climate change, and encourages customers to take mutual responsibility for the product life cycle through repair, reuse and recycling. Even though Patagonia’s products are often more expensive than its competitors’ products, consumers increasingly show they're willing to pay for purpose.
Patagonia’s business model has clearly paid off as the company continues to cultivate a loyal fan base, and has even been a contender for Inc.’s Company of the Year. This demonstrates that playing the long game of building customer lifetime value can create more value than chasing new sales.
Build Trust With Key Audiences by Serving Your Customers
Customers are quickly turned off by a brand that hasn't earned their trust. After all, research shows that 96 percent of consumers don't trust ads. So, how can you ensure your marketing doesn't get lumped into this bucket?
Ultimately, customers don’t want brands to capitalize on their personal data and interests without receiving something meaningful in return. Therefore, brands must quickly provide consumers with curated, personalized experiences. Anyone can purchase a product, but today, many consumers care more about how they acquire that product. Make sure to continuously ask yourself: How is my brand serving its customers?
What Does It Mean to 'Provide Value'?
More than ever, brands must also compete on multiple planes of value: experience and convenience. The value of convenience is evident in Amazon.com's business model. The company is reaping the benefits — to the tune of a $1 trillion dollar net worth — of the convenience it offers Prime members through free, one-day delivery, one-click purchases and automatic reorders.
Curated online shopping platforms provide both quality customer experience and convenience. When a consumer buys a product, brands typically follow up with recommendations for related offerings. Using data provided by the customer’s order history, companies develop an understanding of a consumer’s unique interests, and then match shoppers with metadata from similar shoppers. In this case, they’re offering value by saving customers time, preventing them from wasting hours scrolling through the site to find the product they’re looking for.
Due to the current economic state and marketing environment, the stakes for brands to meet customer expectations are higher than ever. Beyond providing value in the form of products and services, customers expect to be valued as individual shoppers and have their voices heard. Brands with affinity and long-term customer loyalty are best prepared to move through the next several months — and year — with customers willing to reward value-driven brands.