Today companies face ever increasing global competition, whilst striving for continuously growing profits and market share. Most firms focus on achieving high customer satisfaction at every stage of the customer journey. But satisfaction is not enough!
A recent study published by the Harvard Business Review suggests that customers with an emotional connection to a brand are 52% more valuable than highly satisfied ones.
They purchase more and more often, are less price sensitive, pay closer attention to promotional material, follow advice and actively promote the brand.
But how can a brand build emotional connections with their customers?
A brand has to understand their customers’ deep and often unspoken needs and link these motivators to specific purchasing behaviour to evaluate which desires are most profitable.
Emotional connections may differ between industries, categories and customer segments and may even shift in a segment depending on where a customer is in their customer journey.
Each brand needs to identify a specific set of needs that motivate their key customers and drive sales:
- Examine how the top quartile of your customer base or your most successful location differ from others
- Search for the key motivators of these connected customers
- Quantify the impact of different motivators on purchasing, spending, loyalty, and advocacy
- Gain a deeper understanding of connected customers through online surveys
- Evaluate motivators separate from your brand (reasons for brand choices do not always match key motivators)
- Develop informed strategy and optimise investments to turn highly satisfied customers into emotionally connected ones
- Make emotional connection a key objective not just in the marketing department but across the firm
- Regularly review customers’ emotional connection levels, as well as the correlation of customers’ emotional connection scores with lifetime value measures, such as annual spending, churn and tenure to adjust the strategy
A retail case study has shown that the implementation of an informed strategy led first year sales of new stores to exceed past averages by 20%, leading to shorter breakeven times and higher returns on capital. Sales grew by 3.5% in comparison with the annual average of just 1%, whilst inventory turnover increased more than 25%. Market share and customer advocacy also grew, contributing to record-high customer lifetime values.
The retailer had identified the need for a sense of belonging, a sense of thrill and a sense of freedom as key motivators. The brand redesigned their stores and implemented a social media campaign were customers could share their favourite outfits to satisfy their customers deepest desires.
Actually, some of the world’s leading brands mistakenly believe that being considered a “good brand” by a large percentage of customers will secure long-term success. However, the blue bar in the following graphic demonstrates how many customers these brand failed to build an emotional connection with.
This emotional connection gap represents an enormous opportunity for all brands to transform satisfied customers into emotionally connected and more valuable ones.
Know what your customers are thinking. It’s really that simple.
Read more about the Key to Successful Marketing.