The combination of consumer empowerment via the Internet and social networking, ever-inflating consumer expectations, and experience with price promotions and discounting have finally reached saturation levels, triggering a tipping point in the branded world, where emotional engagement is the dominant driver of purchase decisions and brand loyalty. The indisputable primacy of emotional engagement with successful brands is the critical finding in the 17th annual 2013 Brand Keys Customer Loyalty Engagement Index (CLEI), conducted by brand and customer loyalty and engagement consultancy Brand Keys.
“It should come as no any surprise to marketers that consumers seek greater levels of emotional engagement with products and services they stick with and make profitable,” said Robert Passikoff, president of Brand Keys. The rule of thumb should be to view the decision process to buy a brand—and then buy it again—as more emotional than it is rational. Estimates for most categories report a 70:30 ratio. “Marketers have made some initial stabs at trying to understand emotional engagement via flavor-of-the moment approaches like neuromarketing and brain activity measures, which are assumptive and aren’t really generalizable, and none of it identifies what products and services need to do to remain successful brands,” stated Passikoff.
Brands—products and services that consumers do not see as being freely interchangeable—that appear at the top of the 2013 year’s survey, include: Samsung (taking the #1 spot from Apple in the smartphone category), Amazon (which took the #1 spot from Apple in the tablet category and kept its #1 ranking for e-readers), and Hyundai and Ford (which tied for #1 in the automotive category), all exhibit much higher delivery against emotional category engagement drivers.
“For example,” said Passikoff, “increased expectation in personalization and a sense of personal productivity in the smartphone category was what contributed to Samsung’s triumph over Apple. Unfortunately, those things don’t show up in tracking studies, ‘neuro-sensorimotor responses to market stimuli,’ or digital traffic counts. You need to identify real emotional engagement drivers to do that.”
“And if you look at what drives consumer emotional engagement in a category, it’s clear that the rational stuff is but table-stakes,” said Passikoff. “If you don’t have a handle on the emotional side of the purchase and engagement process, you might as well spend your marketing budget on coupons and promotions.”
For the beauty marketplace, Clinique came in at #1 for luxury cosmetics category, and Colgate was #1 for toothpaste.
For the 2013 survey, 39,000 consumers, 18–65 years of age, drawn from the nine U.S. census regions, self-selected the categories in which they are consumers and the brands for which they are customers. Seventy percent (70%) were interviewed by phone, twenty-five percent (25%) via face-to-face interviews (to include cell phone-only consumer households), and 5% participated online. Assessments are based on an independently validated technique that fuses rational and emotional aspects of the categories to identify the drivers for the category Ideal, and to determine how well the brand meets—or exceeds—expectations consumers hold for the Ideal in the category. The proprietary research technique combines psychological inquiry with higher order statistical analyses to deliver a verified test/re-test reliability of 0.93, with results generalizable at the 95% confidence level. It has been successfully used in B2B and B2C categories in 35 countries around the world.
“Kudos to companies that have sustained their brands and continue to create meaningful differentiation and engagement,” said Passikoff. “Consumers in those categories have, as they’ve done for nearly 20 years via our emotional and predictive metrics, indicated that their expectations regarding ‘brand’ have again increased. Brands able to better meet consumer expectations act as surrogates for added value, engendering more loyalty than those based on the primacy of product and a coupon. This year though, many products and services that consumers formerly viewed as ‘brands’ are now regarded as comparable in all key attributes that drive purchase in their categories, making real brands and engagement increasingly rare, but more profitable,” said Passikoff.
“Of the categories surveyed last year, we found 11 categories, mostly CPG, where the importance of brand or emotional brand value has decreased or disappeared,” noted Passikoff. “That’s the first time we’ve seen such consumer reaction. Of course, companies should have expected it would happen eventually. You can’t build your market on constant low-lower-lowest pricing strategies and promotions and expect your offering to be seen as different or better than the competition—who’s doing precisely the same thing.”
Brand Keys emotionally-based engagement and loyalty metrics found that in the 11 categories they had formerly measured (OTC allergy meds, cosmetics, facial moisturizer, hair color, shampoo, conditioner, laundry detergent, OTC pain relievers, paper towels, pasta sauce and tooth whiteners), the product evaluations by the brands’ own customers were found to be statistically identical.
“Names of products were, of course, known,” noted Passikoff, “but consumer choice is, for the most part, not driven by awareness. Purely rational aspects still drive these categories—primacy of product (does it do what it says well enough that I don’t complain?), location (is it on the shelves where I shop?), is it selling at a good price (where’s my coupon?) – but it doesn’t drive emotional engagement or brand loyalty.”
“Advertising and promotion does drive consumer behavior, but no matter how entertaining the ad, it’s extraordinarily less powerful than being able to leverage emotional aspects of the product and service themselves,” said Passikoff. “If all you stand for is ‘shampoo,’ you’ve become a ‘placeholder’ product, one whose name people know but don’t know for anything in particular and have absolutely no (brand) advantage in the marketplace.”
“Real brand loyalty and emotional engagement is still the holy grail of marketing. Loyalty is still a leading indicator of consumer behavior and profitability. Brand power is one of the first measures of competitive advantage that investors seek, since companies that can leverage their brand always profit from long-lasting customer loyalty that drives sales,” said Passikoff.