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‘Loyalty schmoyalty’ say consumers

While marketers are working on high-falutin’ notions like developing like trust, loyalty and ‘creating a relationship’ between brands and consumers, surpise, surprise, the punters are more focussed on value for money and low prices.

All the social media campaigns in the world won’t eliminate price as a critical purchase decision. Further, contrary to the popular belief among marketers that consumers shop for pleasure (50 percent) and regularly make impulse buys (54 percent), shoppers are more savvy than this with only a quarter (25 percent) of consumers stating they ‘always’ or ‘often’ go shopping for pleasure, and make impulse purchases (24%). (Source: Salmat)

The second annual  SMR_Report_2018 is based on a survey of more than 500 marketing decision-makers and more than 500 Australian consumers. It found that 40 per cent of consumer respondents said that price is the main factor in driving brand loyalty, and anyway, they don’t consider brands while shopping.

Nearly one in five consumer respondents said they are loyal to only one or two specific brands and two in five said they buy the products they need without taking much notice of the brand.

Nearly half of marketers said they are focusing on creating loyalty through quality customer service, 45 percent said they are doing so by offering trust, respect and promise, and 40 percent said they are doing so by developing quality products.

But according to the research, 85 per cent of consumer respondents are simply looking for good value for money and competitive pricing before anything else.

Following competitive pricing, consumers said quality of the products (80 per cent), and customer service (76 per cent), are the the most important brand attributes to maintain loyalty. Positive online reviews (61 per cent) and free trials, samples and discounts (48 per cent), were also rated as important factors for maintaining brand loyalty.

While the camera company marketing departments throw their budgets away on narcissistic company websites and social media campaigns, customers are seeking their purchasing information elsewhere. (Source: Salmat).

On average, marketers will spend 41 percent of their budgets online in 2018. In 2017, the top three channels marketers invested in were the company website, social media and email marketing, and these will remain the top three channels in 2018.

A high level of brand choice and price sensitivity has eroded brand loyalty, with two in five (40 percent), consumers stating they do not consider brands when shopping. The temptation for consumers to switch brands is high if a product is either on sale, or if they would receive an incentive for purchasing with 65 percent saying they would switch
based on either measure. (Which might be why Canon has ants in its pants about switching at the counter.)

In most categories, including consumer electronics and tech/telecommunications, 38 percent of consumers said they would switch brands if the price of their ‘go to’
product increased.

Given the large focus on online marketing, Salmat has three tips to help retailers stand out online:
1. Invest appropriate resources in Search: Brands that use Search successfully often find it to be the highest performing marketing channel, driving interest in products and sales. However, many marketers continue to undervalue Search Engine Optimisation (SEO). This points to a disconnect around their understanding of it, and how they’re using it.

In terms of time invested in SEO, marketers often default to a ‘set and forget’ approach. Typically it will be something they look at as part of a website build, rebuild, or update – and expect it to continue performing well as months go by.

For success over the medium to long-term, marketers should dedicate a sufficient portion of their annual marketing budget to Search – how much will depend on the industry and competition. They also need to set themselves up from a resourcing point of view. They need a considered strategy, as well as people who are able to create quality content to which ads are driven, and manage the website.

2. Encourage online reviews
: Salmat’s research showed that 62 per cent of marketers do not believe that online reviews influence consumer purchase decisions. However, two in five (40 percent) consumers said an online review would influence their decision to purchase. Further, 37 per cent said they often go online while in-store to assess customer reviews before purchasing a product. The good news is that, despite the assumption that customers are more likely to leave a negative review, consumers are almost three times more likely to write a positive review than a negative one!

This presents an opportunity for marketers to encourage online reviews. Marketers can either display reviews on the brand’s website using a plugin like TrustPilot, or elsewhere online on Google, social media or other third party platforms. Once this is integrated, marketers can start encouraging reviews by emailing a customer post purchase and prompting them to write a review.

And don’t shy away from publishing the negative reviews either – being authentic and transparent is important for building trust among potential buyers. No one believes it when all they can see is positive reviews. Negative reviews also provide a chance for an experienced marketer to engage with the dissatisfied customer to manage and address the issue, and ultimately turn sentiment around.

Having a social listening tool in place is important to ensure marketers are aware of what’s being said about their brand, and where the discussion is happening – it may not be through the channels you expect. Social listening can be time intensive and medium to large companies may find it favourable to outsource these requirements to an external specialist. On the flipside, smaller companies may find it most cost effective to manage and implement social listening internally, with advice and guidance from an external partner.

3. Connect your online and offline assets
: Despite the increasing number of people who are shopping online, Salmat research found that in general, most Aussies (49 percent) still love to walk into a store so they can see and touch a product (58 percent) and so that they can walk away with it immediately (59 percent).

Many Australian brands are very active online, but online sales count only towards a small part of overall revenue. People are using online search and eCommerce channels in the discovery stage – particularly on mobile – but revert to bricks and mortar when it comes to the pointy end of the purchase. Given this, it’s crucial marketers connect their online and offline assets to help customers with their journey to purchase. Brands doing this successfully have a mobile responsive website, and the correct contact, location and opening hours on Google and their website.

Finally, utilising measurement tools to track purchase behaviour is critical. Once upon a time, stores saw online as a ‘competitor’ rather than a facilitator and complementary channel. However, having measurement tools in place will enable marketers to demonstrate how online activity is influencing offline sales.
– Andrew Lane, Salmat

 

 

 

 

 

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