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Why love isn't enough for brands this Valentine's Day

By Tom Poynter, group MD



The Drum Network article

This content is produced by The Drum Network, a paid-for membership club for CEOs and their agencies who want to share their expertise and grow their business.

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February 14, 2020 | 6 min read

Valentine’s Day; it's a time for love, loyalty, a vague sense of guilt, and the hope that small gestures will inject a spark into a long-term partnership.

Southpaw question the importance of brand loyalty this Valentine's Day.

Southpaw question the importance of brand loyalty this Valentine's Day.

Now now, I’m not talking about your significant other. I’m talking about brands.

Mid February is peak season for cringe-inducing emails from companies with whom you once did business. But it’s no good trying to woo customers (or your other half) on just one day of the year. Getting your customers to love you - and translating that into sales – is an all-year-round task.

The death of Mothercare came in 2019 and with it, decades of high street history came to an end. Beales the department store chain has been the first victim of 2020, collapsing into administration, closing stores and threatening jobs.

The way we shop is changing. Direct to consumer brands are increasing in popularity and more people are using subscription services for everyday goods. The most convenient option (convenience being one of the biggest drivers of loyalty) is often no longer the high street, big name, widely known brands. For better or worse, Amazon has a role in this deprioritisation of big name goods - even venturing into manufacturing its own, lightly branded products.

According to Foresight Factory research, 17% of consumers would be happy for a smart home assistant to automatically make basic household purchases for them. They also predict that by 2025, 11% of global consumers will rely on algorithms to automatically choose and switch financial products on their behalf.

It’s clearly time for everyone to up their game. So let’s look at the methods that are working for brands in 2020.

1. Managed scarcity

Limited editions, invitation-only access and even the famous ‘middle aisle’ at Lidl. These are all ways of generating ‘managed scarcity’, where customers have to get in quick, or miss out.

Whether you want the latest Nikes or a half price pressure washer, this strategy means you’re offering something unique and of democratic value to your customers.

This strategy can be great for creating buzz and positive PR. Kim Kardashian’s SKIM’s is a great example – limited runs, small amounts of stock released at a time, calendar specific releases (like the imminent ‘pink’ Valentine’s collection) all lead to fans clamouring to get their hands on products.

2. Latchkey loyalty

AKA loyalty for the fickle. ‘Latchkey loyalty’ - another level up from the mass exclusivity membership system of yesteryear - asks customers to subscribe to something and offers benefits for doing so. But crucially, doesn’t tie them in.

Subscription models of this type now allow much greater flexibility, allowing customers to skip, cancel and amend their choices with freedom. Though it might seem counterintuitive to offer customers an easy ‘out’, it’s crucial that loyalty feels like a choice for modern subscription models to work.

Take Bulb, an energy company taking on the big six that lets customers come and go as they please. As an added bonus, they pay exit fees to lenders who aren’t nearly so forthcoming with letting customers switch out of a deal that’s over the odds.

Consumers also appear happy to relinquish ownership over possessions in favour of services that enable short-term renting. According to Foresight Factory, in 2019 51% of adults claimed to have used, or be interested in using an app that enables them to rent a car from a nearby location at short notice and for a short period of time.

3. Peer Power

Moving past the ‘mass exclusivity’ trend of 2018/19, just building a membership platform isn’t enough. Instead of focusing purely on the tangible rewards you can offer to loyal customers, think about emotional benefits too.

Fans want peer-to-peer interaction where they can connect with like-minded people in a safe space. Brands should work hard to build a solid community where their consumers can talk to one another, strengthening their loyalty and appreciation of the brand. This works particularly well when the brand plays an active role in the community it has built, keeping in regular dialogue with fans, offering responses, collating feedback and reporting back with updates. It breaks down barriers, moving the conversation on from ‘us and them’ to ‘we’.

Sephora make customers feel connected with their online community Beauty Talk – a forum where users can ask questions, share ideas, and have their beauty questions solved by other makeup enthusiasts. Their Beauty Board offers a unique way to engage with the products and the community. Users can upload pictures of themselves wearing Sephora products and the photos then link to the product pages of all the items used, creating a full purchase cycle without having to leave the platform. Sephora have cracked the code when it comes to fulfilling the needs of their passionate fans, and other brands would be wise to follow suit.

The question of how many consumers truly ‘love’ brands is one for another day – is love just nostalgia or convenience wrapped up with a bow on it? But what brands really need is to find new ways to make their customers’ lives happier, easier, more exciting and surprising all year round. In the end, that’s what all good relationships are built on.

Tom Poynter, CEO at Southpaw.


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