There are many reports espousing the idea that Brand Loyalty is dead. Of course, this isn’t really news especially to those who actually deal with the impact to business.According to a recent article published in Forbes, 90% of the leading household goods brands are losing market share on consistently low-growth categories and a Deloitte study shows 73% of consumer packaged goods categories are showing a decline in their status as a must-have, even when on sale.
There are more philosophies as to why this is happening than there are facts. Some argue that loyalty itself has been eroded in society: some blame the changing nature of work practices for millennials and others blame the continual appalling behavior of large corporations. Maybe it’s none of these, maybe it’s all of these, or maybe it’s that our brains are now wired differently.
Whatever the reason, it’s clear that immediate access to information is changing the way customers behave. It used to be that an advert needed to create a memorable piece of communication that could still influence the shopper once they reached the store. Today, our products mostly sit next to-or within-the same interfaces in which the advertising messages appear. More often, customers are able to check the relationship between the message and the experience.
Brands are no longer the proprietary tool for the founding company—and the shift has influenced purchasing behavior in the population who grew up in that digital context. ’Moving On 2012,’ a MegaTrends report by WSL Strategic Retail, revealed that 80% of millennials looked for the lowest price possible when shopping and that 60% are more inclined to bypass their favorite brand if a cheaper alternative is available.
The problem with this overarching trend is that without the added benefit of Brand Loyalty the price of customer acquisition soars as the lifetime customer value drops. The spend to return ratio for customer acquisition remains static at best. All while the value of a product’s feature set is being diminished through competitive pricing.
Within these volatile markets there simply isn’t enough time to amortize your go-to-market cost over the lifetime of the product. How can anyone advocate for spending on long term brand thinking in the context of markets that don’t give the opportunity to reap the potential value?
This effect can be seen clearly in the shifting market of consumer drones. 3DR invested heavily in their stand-alone consumer product Solo. They had an amazing customer base for their previous models, an avid following by enthusiasts and the most widely used navigation control system PixHawk. 3DR burned through $100,000,000 in funding but the product never caught on. Instead customers flocked to the competitor SZ DJI Technology Co, who pushed forward their launch window for a product iteration and slashed prices to attract customers. DJI used a similar strategy to scuttle GoPro’s foray into consumer drones. Two days after the launch of the Karma, a foldable action drone, DJI announced Mavic Pro an almost identical product.
So, if Brand Loyalty is dead, what could replace it?
I believe that loyalty has become the responsibility of the product team rather than the marketing team. As product designers and engineers, we’re not just designing the product we are about to launch, we are also designing the potential product advocacy for all subsequent products. I’m also beginning to believe that the ‘Stickiness’ of an interface is the solution to the rising cost of acquisition and the waning rate of retention.
I called this thought ‘Interface Loyalty’.
Now that most products are digitally enabled or capable of processing data, it becomes quite possible for an existing product experience to inspire the relationship with an upgrade, or an adjacent product. For instance, your car knows how you drive, it knows where you drive, at the end of my lease shouldn’t the car suggest an appropriate upgrade?
The challenge is that product teams aren’t necessarily rewarded for building consecutive growth. In fact, most of the time it’s quite the reverse, the product team wins when they deliver an end product with the smallest useable feature set, at the lowest price, in the least amount of time.
Also the dysfunction between product and marketing within most Fortune 500 corporations seems like it’s at a new high. There’s little reward for connecting the dots between the two departments and rarely anyone with the responsibilities to bridge them. Even the cadence of the roadmaps are at odds, with marketers sticking to seasonal sales calendars and product teams adopting agile sprints.
It’s not all bad news: enlightened product teams know that they’re enabling a set of connected experiences rather than building a single product. But we do need to establish common processes, frameworks and measurements that enable product and marketing teams to work together more effectively. And we need some solid examples that show the potential value interface loyalty.
Here are some candidates:
In 2013 I did a piece of data visualization which mapped the cadence of Apple’s iPhone marketing calendar across six years to the release of software and hardware. What became quickly obvious was the organizational and operational integration meant that a new piece of software, iOS4.2.1 on an iPhone3, could give existing customers some of the feeling of a new phone, the iPhone 4, without them buying it. Apple leveraged the existing software relationship to create demand for new hardware. Essentially, they’re using the software update as a piece of marketing.
Building Familiarity of Affordance
We’re lucky enough to be a two car family having a Mercedes CLA and Toyota Sienna.
The Mercedes has the gear shift on the right hand side of the steering column, the lever is the same exact design as the indicator lever on the left. There’s a silver push button on the end of the gear shift which places the car in park. The Sienna, also has a lever to the left of the steering column, it operates the windshield wipers, the button is the windshield washer.
A weekend of driving the Toyota Sienna renders me incompetent to drive the Mercedes without fear of placing the car in park as intend to wash the screen. The familiarity of the interface reduces my ability to adapt to new interfaces, it becomes a reason why I won’t or even can’t change brand.
Access to a Connected Experience
It would be easy to think the connected running experience Nike+ is a product or an accessory. The truth is Nike+ is a communication channel, Nike+ is a way for Nike to stay connected to their existing audience and a channel without the noise of YouTube or Facebook.
The value of an owned channel of communication is manifold, but what more impressive is Nike’s understanding that the channel of communication wasn’t owned, but shared. Nike+ could connect customers to each other. To that point, Nike created the Human Race, a Global 10K run challenge which connected everyone together. This connection is another way to build loyalty.
The Value of an Ecosystem
One hesitates to drag out Apple as a lazy example of a company doing something well, but this is really personal. I’m one of the apple customers who is actually looking to move away from the brand.
I implemented Google Suite as soon as I started my business, this makes me a prime customer for Google’s new hardware. But, I haven’t moved because of four core elements of the Apple ecosystem:
Messages is a simple, intuitive and most importantly free way to stay connected with friends and family.
As Microsoft make Skype more and more complex and Google buries Hangouts further in the flow FaceTime becomes my standard video calling platform.
Wallet has become the easiest way to manage travel tickets and events, the design of the interface keeps some of the beauty of tickets, hard to justify, but also hard not to love.
The set up and management of mail accounts within iOS is a dream. I have so many email addresses to manage, this becomes a deal breaker with any new ecosystem.
Familiarity with an ecosystem and the investment in multiple pieces of functionality mixed with the shared benefit of centralization creates a sticky interface which is hard to let go of.
The Unification of Data
I recently worked with an astounding startup called Neura. Their vision is that the ownership and control of all device data will enable people to gain deeper insight into their actions and behavior. If customers realize the value of the overlapping data points, the companies who deliver the most valuable insight will be those who create the greatest loyalty.
A Bank for Content
I never really wanted a relationship with Vudu. But when I cut the cord from cable TV in 2015 navigating the complexities of the over the top TV subscriptions became overwhelming, especially when most of the ‘channels’ offer similar content. A friend of mine offered to share his library of films through his Vudu account. All I had to do to access them was to sign up. Now, I have a dozen of my own movies stored in Vudu and every time I buy a new film, the likelihood of purchasing them from Amazon decreases exponentially.
Ubiquity of Access
It’s hard to fault googles software strategy – making it free and accessible to everyone. But comparing Google Suite to the dominance of Microsoft Office is missing the point. Google Suite offers a small percentage of the functionality of Microsoft’s products, but Google’s insight was that most people only use a small percentage of the functionality. Google Suite is a good enough solution which creates user loyalty which grants access to a much bigger prize. Sharepoint is a Multi-Billion dollar piece of business for Microsoft, by giving away free ‘good enough’ tools Google has grabbed a large percentage of the collaborative workflow.
Reduction of Friction
I must say I was skeptical of Amazon’s Dash button, but the strategic value of automatic purchase is obvious. Amazon doesn’t want anyone to have to think about shopping. Like any smart logistics company they want to place the goods you need within simple reach and get them to you before you know you want them. Anticipating need, or reducing cognitive load is a guaranteed way to create a higher barrier to competitive reconsideration.
The Offer of Service
Layering in Software enabled service is a great way to bridge the gap between product upgrades. The service agreement is continual, there’s no seasonal cadence which makes sync with product development cycles. And the growth and stability of AI means that service can be delivered at a fraction of the cost. Creating an ongoing service relationship to complement your physical product feeds loyalty.
The Depth of Personalization
As our tools, vehicles, homes and appliances become more software enabled the ability to embed a layer of customization becomes easier but the cognitive load of setting up a new product becomes increasingly difficult. The effort of personalization not only creates a bond with the physical object or space, it creates a cognitive mountain between your product and the competitions.
One look at Tesla’s central console and the level of customization it offers: seat position, ride quality, lighting presets, keyless entry, entertainment and communication functionality, once you are in your car it becomes very difficult to leave. I feel this anxiety every time I use a hire car and it automatically sucks in my address book. The value personalization creates for car after only a day is only magnified when you own the car for years.
Whether its swipe to unlock, the wiggle of an app ready to be delated, the sumptuous dial of a digital thermostat or the sharp intake of breath on a video chat window, the way our products behave creates a level of understanding, which inspires familiarity and market dominance.
If a company is able to define the way a new product works, what it’s called, how it sounds and how it behaves they have a decent chance at being category leader. This, of course largely contradicts the core premise of Interaction design thinking. Christopher Alexander the father of modern interaction design proposed the idea that a single set of common interaction patterns should cross all products and categories, but the free market drives every product owner to try to own the common behavior of interaction and crate protectable IP.
Simplicity drives the generally accepted belief that a product should be slimmed down to its core set of features. WeChat on the other hand has a wallet, chat functionality, blog, entertainment, friend radar, walkie talkie, news portal and work productivity tool in one place. There are millions of official accounts ( light weight apps) that live inside WeChat. It is a product within which you can do everything. If that’s not creating loyalty, I’m not sure what is.
An interface can actually become a barrier to loyalty so creating an invisible interface which runs in the background of people’s lives is a phenomenal way to create loyalty. Responding to gesture, movement, voice, expression all create ties into deeper understanding. Designing a product to interpret actions lowers the adoption barrier.
The idea of Interface Loyalty implies not only connecting all your products across time and context but also creating a bridge between the Product and Marketing teams within your organization. Brands, Products & Services have become so entwined it makes little sense to talk about them separately, or to build specific departments to serve just one aspect. Yet, this is how most companies are organized.
Capitalizing on Interface Loyalty requires product and marketing to work together to create coherence across the customer experience. People aren’t persuaded by message, a promise or a set of beliefs alone. Consumers are persuaded by trial, experience, value of an ecosystem and coherence of experience.
The best products, brands and services are solutions that create a level of coherency in the end user experience:
Product = Brand
Service = Product
Brand = Service
Brand + Product + Service / Touchpoints / Time = Experience
Brand = Experience/Promise
I truly believe that encouraging enlightened thinking in our product teams, giving them the responsibility of creating advocacy and loyalty will result in a decrease in the cost of customer acquisition and retention. This means that there’s a larger budget for product research and development. I know that these budgets aren’t currently connected, but this is a cost to the business as a whole. We need to reorganize our companies, departments and disciplines to better reflect the fluidity of the market and the shifting demands of the customer.
10 Steps toward Interface Loyalty:
- Give Product & Marketing Teams shared KPI’s
- Layer Roadmaps, Updates = Marketing
- Build Interfaces which are Tuned to Human Factors
- Incorporate Machine Learning to Adaptive Interfaces
- Apply Responsible Data Feedback
- Design Custom Behaviors
- Disconnect Product Changes from Interface Changes
- Allow In Product Sampling
- Understand the Speed of the Market
- Beware, as product and brand become one – Brand life will get shorter and need quicker cycles, Invest often, iterate, Build Patterns.
About the Author
Marc Shillum is the founder of Chief Creative Office℠ a strategic consultancy that creates a new model for creative leadership. Conceived as a Think/Make-Tank for Business Leaders who own the responsibility of building consistency between product, market and operations within highly dynamic markets – CCO defined brand building for the modern age in the seminal thinking published in the white paper 'Brands as Patterns'. CCO has ongoing relationships with organizations across the entire business spectrum and every part of the customer journey. From Fortune 500 companies such as Discovery, Adobe, eBay and Lego to well to established Start-ups like GoPro, Box or series A and B startups like Canary, Transformair and Skreens.