Tuesday, January 17, 2017

Brand Loyalty In America Today

Soaring customer expectations are creating an increasingly challenging environment for brands seeking engagement, according to the 22nd annual Brand Keys Customer Loyalty Engagement Index® (CLEI).

Brand engagement is a measure of how well a brand meets expectations that consumers hold for the path-to-purchase drivers in a given category. Brands are measured against a Category Ideal (100% of what consumers expect). Brands best meeting consumers’ expectations generate loyalty and profits. Brands that cannot meet expectations lose customers and market share.

This year’s CLEI examined 83 categories including 740 brands – everything from Automotive and OTC Allergy Medications to Computers, Fast-Casual Dining, Retail, Smartphones, and Alcoholic Beverages, with brand leadership shifting dramatically in 58% of the categories. For a complete list of the CLEI’s 83 categories click this link.

Cross-category, expectations increased +23%. Brands improved by only 4%, which leaves an enormous gap between what consumers want and what brands deliver. Expectations grew the most in 1) Online: Social Networking and Entertainment (+35%), 2) Technology (+32%), 3) B2B: Services and Equipment (+30%), 4) Cosmetics (+28%), and 5) Personal Products & CPG (+26%). (Interestingly, there was only one category where expectations virtually stood still. Non-alcoholic beverages were up 9%, the lowest expectation growth in years and the reason selling soft drinks has become so problematic).

“Brand engagement” is pretty straightforward. There’s an Ideal for every product and service; it’s the yardstick consumers use to measure brands. Defining your category’s Ideal is where it gets tricky. The process is more emotionally-based than rational, so defining the Ideal, and identifying what consumers really expect has to be more penetrating and subtle than the typical 10-point scale survey. Below-the-radar psychological metrics are what you need, because today’s consumer does not behave as he or she says, does not say what he or she really thinks, and does not think what he or she feels.

That’s because consumers “talk” among themselves before they talk to brands, with social networking super-charging expectations and that results in massive gaps between what people really want and what brands deliver. Unfortunately, that also creates massive gaps among marketers about what actually drives brand engagement.

The Ideal describes the precise path-to-purchase drivers, how the consumer will view the category, compare brands and how they will engage with the brand, buy, and remain loyal. Most marketers look at the world through a brand lens. It’s their brand, after all. The consumer, on the other hand, looks through a category-lens and that dichotomy creates problems when marketers try to engage consumers. Drivers are category-specific since consumers don’t buy smartphones in the same way they buy cosmetics or pizza so static ratings lists can be very misleading!

This year 49,168 consumers, 16 to 65 years of age from the nine US Census Regions, self-selected the categories in which they are consumers and the brands for which they are customers. Seventy (70%) percent were interviewed by phone, twenty-five (25%), percent via face-to-face interviews (to identify and include cell phone-only households), and 5% online.

Of the 740 brands included in the 2017 CLEI, perennial brand engagement experts rose to the tops of their categories again this year: Avis, JetBlue, Hyundai and Ford, Dunkin’ and Starbucks, Apple, Discover and American Express, GEICO, Konica-Minolta, Amazon.com, Domino’s, Facebook, Google, Chanel and AT&T.

Smart brands are learning that engagement is the best route to profitability, and in established categories, 2017 revealed some newcomers at the top of their categories, showing up as engagement champions: Allegra, Chase, Coors, 5 Guys Burgers & Fries, L’Oréal and Kiehl’s, Sabercat, Magnum Ice Cream, Hyatt, State Farm, Major League Baseball (MLB), Trader Joe’s, Zara, Nordstrom, Johnnie Walker and Fidelity.com.

We added 11 categories, with first-time engagement winners: Red Bull, Doritos, Fritos, Planters, FOX News, LEGOS, Chobani and Yoplait.

Bottom line? Brands that can best fill the expectation gap win.. And, as these metrics are predictive of consumer behavior, results will show up in market share and profits in the New Year. Want to see how all this plays out in the marketplace? Give a listen here.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Sunday, January 01, 2017

A Retrospective View of Predicted Trends For 2017

If the title for this year’s Brand Keys Trends for 2017 seems a bit contradictory, think about the two biggest questions being raised just as we enter the New Year: “How did we get here and how did researchers get it so very wrong?” As market researchers and the media argue about it, the answer is actually pretty simple.

First, you shouldn’t use mid-20th century survey (digital or not) to measure 21st century consumer values and behaviors. Those metrics don’t work the way they did 20 years ago, or even 10 years ago. Second, today’s consumers don’t behave the way they say they will and traditional techniques are more likely to measure what consumers say, rather than what they really think. And third, because the consumer decision process is far more emotional than rational, consumers don’t think what they really feel.

The reality is more effort has been expended figuring out how to better target consumers than to actually understand them, which explains how we got to where we are and why almost everyone else is anguishing over the fact that they failed to predict the outcome of the 2016 U.S. election. This is not the first time researchers have gotten something wrong, and it won’t be the last, it’s just never been on this kind of grand scale! Happily, Brand Keys got it right. Back in September 2015. Take a look at what we said. So, as researchers who only have eyes for emotionally-based, accurate, and actually predictive research, we appreciate having a real foundation for insights, particularly when it comes to trends.

Trends ultimately reveal themselves when consumers’ emotional expectations surge. Brand Keys has been measuring those for over 30 years. Our research is based on leading-indicator metrics and annual interviews of nearly 100.000 consumers. And because consumers and their actions in the marketplace are a product of their values, we have been able to identify trends well ahead of the “global” research shops and “hip” trend watchers, well before they show up on traditional research radar screens and before consumers articulate them. When it gets to that point it’s too late to be of any real use. Beyond postmortems.

That said, because everyone is asking how they got it so very, very wrong, we decided to take a retrospective look at some key trend themes Brand Keys identified years ago, that will make themselves felt in 2017.

Brands will get more emotionally in tune with consumers: Values that drive the decision-process for virtually everything will be more emotionally based. Rational is price-of-entry. Accurately measuring consumers’ real emotions will be critical for both precision and success. (2008)

Expectations will increase and brands will need to predictively measure them: Over the past 5 years customer expectations have increased on average by 25%. Brands manage to keep up by only 6%. That’s a big gap that a new brand can come in and cash in on. (2007)

Consumers will talk to (and about) themselves about bespoke products and services: Consumers’ heightened awareness of their actual control and their ever-increasing access to information will result in intensified cravings for customized and personalized products and services. (2012)

Unfulfilled expectations = consumer rebellion: Consumer engagement has been inaccurately associated with consumer attention levels, time-spent, and personal entertainment. Marketers will need to measure how well the brand is perceived versus the Category Ideal if they want a real measure of brand engagement. (2009)

Brands will need to prove themselves: Veracity, accuracy, and trust will become more critical than “inspiration,” and “entertainment.” Social media’s democratization of content creation will require brands to actually prove themselves. Stephen Colbert’s “truthiness” is something consumers will need to be on the lookout, so brands beware. (2006)

It’s not going to get any easier being just green: Ethics – beyond fair trade, sustainability, and corporate responsibility are going to be expected – and questioned – more and more. CSR will be an expectation not a differentiator. Climate change will still be a catalyst for change, but given the ease of consumers’ abilities to pull back the brand curtain, watch for ethical standards to have a greater influence in the consumer decision process. (2010)

Naked truth will be more important than well-dressed lies: It’s going to be showing versus talking. Storytelling is well and good as long as it is fact-based and believable versus just being an entertaining fairytale. Consumers will become more wary of brands that betray their trust. (2015)

Brand will matter more: Outreach and consumer accessibility will become more laser-focused and but brand will still matter. Being known will not be the same thing as being known for something meaningful. Campaigns and metrics will need to move beyond just the transactional or marketers will just end up selling commodities. (2006)

Consumers will not wait: Instant connectivity and a culture-of-now will result in consumers frustrated with red-tape processes and bureaucracy. Brands will have to react faster and faster if they want to keep (and keep up with) consumers. Real-time and real answers will become real important to consumers. (2011)

We’ve said this before – but in light of the research and media industries’ self-doubt and self-examination – it bears repeating. When it comes to truly predictive measures and trends there are three kinds of marketers: those who let it happen, those who make it happen, and those who wonder what happened.

We hope our view of what’s coming down the road next year provides brand marketers with the opportunity to embrace new methods of brand and consumer engagement and insight, build new business and consumer measurement models, and create new opportunities – so they end up in the group that makes it happen.

We wish you all an accurate, engaging, and profitable 2017.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Wednesday, December 14, 2016

Holiday Tech Caution: You Better Keep It Simple

We’re hoping that songwriters, John Coots and Haven Gillespie, will forgive us for muddling their song in aid of brand commentary, but given the season.  .  .

You better watch out,
You better not cry,
You better not pout
I’m telling you why:
If you had your hopes up for an Apple Watch from Santa – or anyone else – you’re likely not getting one this year!

Yes, it doesn’t scan as well as the original, but it captures the Apple Watch brandscape perfectly. Sales have been down by 71% year-over-year, despite the release of their Series 2.

Back in 2015 we conducted an analysis of the wearables category, which included the Apple watch and other Fitbit-like fitness tracking devices, and predicted that Apple would see very-early-adopter success, but not a lot more when early buyers thinned out and when consumer expectations grew regarding complexity, or the lack thereof. And that’s exactly what happened.

Apple – whose brand heritage was founded on design – seems determined to add complexity to a category where consumer expectations are based on simplicity. Oh, and reliability, which had been a hallmark of Apple, but the watch’s operating system has been deemed by consumers as less-than-intuitive. For $349 the Apple Series 2 is now GPS-enabled and waterproof, but many of the watch functions are dependent on the iPhone.

Fitbit – despite difficulties with its smartwatch – have seen double-digit increases in their shipments, confirming consumer desires for no-frills simplicity.

So if you’re making your lists and checking them twice, keep this in mind: when it comes to technology: complexity smothers and simplicity breathes. Particularly when it comes to consumer engagement, ROI, and brand profitability, for goodness sake.

Those are the kinds of gifts that make every brand’s spirit bright!

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Sunday, November 27, 2016

Only One Shopping Day Left Till Tomorrow!

Two weeks ago we reported 17 months of election coverage, political ads, and an unexpected presidential outcome shifted shopper attentions away from thoughts of holiday celebrations, sugarplums, and shopping lists. The result? Much like this year’s election. We reported more conservative holiday budgets and a delay in consumer decision-making regarding holiday shopping.

This year Black Friday, Small Business Saturday, Sofa Sunday, Cyber Monday are all going to be really busy. This is Brand Keys’ 22nd annual national holiday shopping survey and, historically, this kind of shopper behavior hasn’t been typical of any Presidential election we’d ever seen or even recent-year shopping cycles.

Consumers indicated that they were planning to shop even later than previous years, pretty much starting with Black Friday. The 2016 election cycle resulted in consumers voting for only a 1.8% increase in holiday spend, or an average $900 total spend per household. According to 12,764 shoppers it’s more watch-and-wait this year than ever before.

Brand Keys utilizes a combination of traditional interviewing techniques and validated, psychological measures that correlate very highly with consumer behavior. That ensures the results are an accurate accounting of ”what people think (and what they’re gong to do), and not just what they say they think,” something the political pollsters and a lot of holiday shopping surveys missed this year.

Previously consumers had been holiday shopping earlier and earlier. Last year 84% of consumers reported shopping before Black Friday. This year only half that many consumers (41%) reported that they had shopped or intended to do so before Black Friday. That means 59% of shopping is going to start Black Friday, so retailers, start your engines, although a lot of that shopping is gong to be more online than brick-and mortar, which is exactly what happened.

Virtually all consumers interviewed (98%) indicted that they were buying online again this year – the default venue for browsing for gifts, promotions, price checking, and actual buying. While consumers indicated that they intended to spend only a little more than last year, they are seeking comfort, balance, and gratification in a stress-free period of time. So spend about the same and take your own time to find the perfect gifts, which is what they’re doing. And, as it turns out that’s a lot easier online. Just saying.

True, there were more shoppers shopping this past Black Friday and Small Business Saturday and Sofa Sunday, but the majority was shopping for bargains. NBC reported that a “staggering” number shopped online. And here’s a tip for next year: the biggest Black Friday deals were actually picked up online on Sofa Sunday. Here’s what consumers are buying:

Gift Cards                                        97%
Clothing and Accessories                80%                                                   
Electronics/Phones/Computer         50%                                       
Personal Care Products/Spa           45%   
Kitchen/Cookware                           42%   
Toys                                                 20%               
Jewelry                                            20%                                       
Food and Wine                                20%   
Sporting Goods                               12%   
Books                                              10%                           
Home Décor                                     2%                                        

Just as in holiday seasons past, value is paramount. Consumer expectations regarding outreach and convenience, particularly for mobile, are up again. Again, why there’s more shopping online. Just wait till Cyber Monday is over for those numbers!

Someone once said, “Here’s wishing your Black Friday injuries aren’t so severe that you can’t click a mouse on Cyber Monday.” According to our research, that doesn’t seem to have been a problem.

And this year in particular, it’s probably worth remembering that there’s always one shopping day left till tomorrow!

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Sunday, November 13, 2016

Trump Brand Triumphs: The President-Elect Effect

In the wake of changing demographics, shifting party coalitions and voter attitudes, and significant wins in key battleground states, Donald J. Trump defied all political polls to become the United States’ next president-elect. Not only did the win come with 276 electoral votes, the win also came with an enormously needed re-boost to the Trump brand.

A post-Election Day, overnight National study conducted by Brand Keys, the New York-based brand engagement and customer loyalty research consultancy revealed that in each of the seven (7) categories where Brand Keys has tracked the Trump brand – a brand whose added-value had been badly battered by campaign rhetoric and the release of a video tape that captured Mr. Trump making lewd comments about women – rebounded to levels close to or exceeding added-value measures seen in April of 2015, just prior to his announced presidential candidacy.

Whether you voted for him or not, Mr. Trump has been one of the most powerful brands we’ve ever tracked. You could add his name to anything from ties to buildings and the increased perceived value of the products fell into the 20% to 37% range. Which was very high, enviable by any category or brand standards, and what a brand is supposed to do. Now, we suppose, he literally qualifies as “the most powerful brand in the world.”

When Mr. Trump threw his hat into the presidential ring in June of 2015, some of the product and service categories Brand Keys tracked were positively affected; some were negatively affected. That didn't totally surprise or alarm us, though. In becoming a candidate Mr. Trump changed both the brand paradigm regarding consumer expectations and values surrounding the Trump brand and also blurred the traditional lines regarding where the “Trump brand” was expected to compete. These shifts changed how consumers perceived the Trump brand. And an oft-contentious campaign didn’t help foster consumer emotional engagement and brand loyalty levels. But the disclosure of a videotape capturing Mr. Trump making lewd comments about women seemed to have placed the Trump brand in real peril.

Brands ­– particularly Human Brands, people who are seen to be the living, breathing embodiments of those set of values they alone are able to so successfully, seamlessly, and profitably transfer to products and services – that are then so negatively and publically exposed the way the video did to Mr. Trump, don’t usually come back as strong as they used to be. Think about what happened to Martha Stewart or Tiger Woods. Their brands survived but they never came back as strong as they were before the brand imploded – after they went to jail or were forced to do a PGA-Adultery walk-of-shame, for example. Human Brands don’t generally get a second chance to breath real life back into their brands or rekindle the desire in the hearts and souls of consumers. Not at their former brand strength, added-value levels, at least. These shifts are incredibly strong.” But apparently winning a presidential election is the exception that tests the rule.

According to 1,203 registered voters in the 9 US Census regions, 100% of the categories where Brand Keys has tracked the Trump brand that had been negatively affected a month ago with the Access Hollywood tape disclosure, all rebounded to Post-Candidacy +added-value brand levels. Added-value related to the Trump brand – that is, how much more a product or service is seen to better meet consumer expectations and be seen to be worth more monetarily with the Trump brand – is back up significantly from a month ago in each of the seven categories where Brand Keys has historically tracked the Trump brand. In some categories, the added-value brand numbers are the highest Brand Keys has ever tracked for the brand.

Trump Brand
Access Hollywood Tape Release
Trump as President-Elect
Country/Golf Clubs:
Real Estate:
Dress Shirts:

From a political perspective, with the White House won, the Senate race no longer a toss-up, and the House firmly within GOP hands, a brand that was once deemed toxic by many consumers – and totally mismeasured by most researchers and political polls – is now seen as not only a safe option, but an emotionally desirable option. Especially given the new set of values that the brand has created around itself: victory, self-confidence and determination, a sense of the visionary, and ultimately greatness. We’ll have to factor those into our next Presidential Model, which was the one that identified Mr. Trump’s suitability as a Presidential candidate back in June 2015!

The election occurred in contrast to predictions by the political polls and pundits, and we’ll leave it to them to predict the future when it comes to presidential politics. What we know for sure is that these brand engagement, added-value numbers correlate very highly with consumer behavior and consumer perceptions of added-value for consumers’ own sense of self and actual product/service price value. They certainly did in voting booths across America. One should remember that as regards the brand engagement measures, these are leading-indicators, which means that we’ll be seeing their effects six to nine months down the road, although we’d have to do some additional drill-down research to predict the product and political effects of those consumers/voters who feel disenfranchised.

All that said, as currently calculated, this version of the Trump Presidential-Elect Brand’s added-value also adds a lot of new meaning if you’re reserving the Presidential Suite at a Trump Hotel or scheduling a tee-time at a Trump Golf Course.

We think that in addition to being a Human Brand, given the election results it’s fair to call it ‘The Brand Commander-In-Chief’!”

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.