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’OrĂ©al 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.