March 30, 2019

By Laura McCullough, Managing Director for Sales and Marketing Effectiveness, Nielsen

At the outset of 2019, we have unequivocally entered a new era of extreme customer disloyalty. Consumers today are more disloyal than ever before; the once steadfast consumer retail environment primed to grow brand-loyal hearts has shifted to a more capricious climate, where product infidelity is now the norm.

In fact, according to a recent Nielsen survey, a whopping 32 percent of Americans claim they are more product-disloyal today than they were five years ago. Couple that with the notion that more than half of the top grocery retailers in the United States have also lost share of wallet over the past five years due to retail disloyalty—and it is clear that brands have a major cheating problem on their hands.

The fluidity of digital discovery is driving disloyalty in an era where choice is at an all-time high. Within U.S. grocery retail, Nielsen numbers show that while the average retail store is almost 7,500 square feet smaller, driven by a shift toward small-format and proximity stores, there are more than 9,000 more products available today than there were 10 years ago. And thanks to online shopping, assortment is also no longer limited by shelf space—it is restricted only by the number of products manufacturers are willing to produce.

To be fair, some categories, particularly in the fast-moving consumer goods space, continue to have high levels of loyalty that sometimes run generations deep. In these unique cases, purchases have long been made on auto-pilot. Toothpaste is a good example of this. But even the most loyal of customers can only buy so much of a given product.

So as we face the multiplying dynamics of brand disloyalty, it is hard to ignore the fact that retailers and product marketers are still spending billions of dollars every year to either retain loyal customers, or obtain loyalty with new customers. This begs the question—should heavy efforts to appeal to loyal consumers be relegated to history? Everything indicates that if past marketing practices are maintained, the answer will be yes.

SO WHAT NEEDS TO CHANGE?

Flip the traditional loyalty model and embrace brand infidelity. Today’s marketers must consider how much time, energy, and investment goes into retaining loyal customers versus attracting new, potentially disloyal, customers. Now, to be clear, this does not mean that loyal customers are not highly valuable. But it is a call to action to rethink how we focus on them—especially when the consistent group of consumers that was once relied upon for sales is (for many) a shrinking pool. Your prime target audience is no longer a mass, ill-defined demographic of loyal consumers. Instead, marketers should be looking to win the interest of the individual. Many companies are still operating in a mass marketing world, when consumers are living—specifically, searching and learning—in a very personalized world. But, luckily, predictive analytics combined with the speed and horsepower of artificial intelligence are now enabling marketers to engage intimately with their consumers, one-to-one, and activate their creative content with laser-guided precision.

Be sure to prepare a strong proposition that resonates at the individual level. Your brand or product needs a reason to exist in a consumer’s life. Remember, brands that successfully break through to consumers service a personal need or fill a purpose. Whether that takes the form of durable trash bags, healthy ice cream, or restorative shampoo, breakthrough innovations drive value in a consumer’s oversaturated day-to-day life. How are you positioning your product as an essential utility versus just another offer?

Find the disloyalty levers that entice potential new consumers to try something new. Consumers have hundreds of touchpoints with media and brands every day. The opportunity here is to learn as much as you can about today’s disloyal consumers. The more you know, the easier it will be to understand and connect those touchpoints with the consumer disloyalty levers that are impacting your business the most.

Play to consumers’ hearts. Disloyal customers thrive on the power to make choices. They want to be courted; they want to be given the choice to try something new. Think about pre-cut vegetables, cold brew coffee, or charcoal, an ingredient trend that has infiltrated and invigorated the personal, skin, and oral categories over the past few years. What all of those examples show us is that consumers are ready to take risks and try things. So don’t get caught waiting for the one perfect moment, offering, or message. Consumers don’t wait for perfection, and in many cases, they reward brands that break the mold.

For the rest of 2019, your job will be to break the traditional loyalty mold—embrace consumer disloyalty, understand the levers, and remove the risk in the mind of the consumer, so consumers ultimately feel comfortable in their product promiscuity. It is imperative to set the bar high, early on in the process—because it all starts with an excellent, breakthrough product. Today, consumers are looking for exceptional products that fulfill a purpose, products with superior value propositions (inclusive of the right price, availability, and convenience) and brands who are able to connect on a personal level. The new objective should be to establish a more fluid relationship with consumers—with the understanding that due to the sheer volume of choices, consumers’ eyes are prone to wander. Keep it fresh, keep it interesting, keep it personal, and most of all, leverage data to find a way to make it easy and enticing for consumers to cheat on their current product with your own.

 

 

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