It was not too long ago when several business pundits decreed that brand loyalty was dead. Their reasoning hinged on their observations that people tend to go for the latest and greatest gadget rather than stick with their known brand. For those brands that bought into this nonsense, too bad for you. Brand loyalty is not dead. There is ample evidence that people are still loyal. However, people may have switched loyalties during the pandemic for a variety of reasons such as availability, omnichannel shopping approaches and inflationary prices.

Recently several high tech service brands in earnings calls have offered that brand preference is making a huge difference in profitability.

PayPal stated the following in its latest Earnings Call:

“And clearly, there is no other digital wallet close to us in terms of scale, and there’s overwhelming consumer preference for PayPal in those wallets. And our super app is showing extraordinarily promising early results. Now we only rolled that out fully in the middle of October across all of iOS and Android, so we’re 3 or 4 months into it. But what are we seeing? We’re seeing double the average revenue per active account when somebody uses our app versus just checkout. When somebody uses the app their propensity to churn is 25% less.”

Additionally, PayPal said:

“And in fact, in some studies, it would suggest that PayPal is second only to debit in front of credit in terms of preference from consumers. And as I noted earlier, like you’re beginning to see more and more preference for brand ecosystems. And, we think that’s only going to become more relevant as we go forward, which is part and parcel to why we’re emphasizing our digital wallet strategy so much because when someone is using our app, is using our digital wallet, they’re much more likely to be engaged with us in other parts of our ecosystem, including off-line transactions.”

Let’s understand the relationship between brand preference and brand loyalty. Preference and loyalty are not the same. A brand must have brand preference if it wants to grow brand loyalty. Brand preference is the necessary stage for reaching True Brand Loyalty.

Think of a ladder.  The goal of marketers is to move your brand up the brand preference ladder, the pinnacle of which is True Brand Loyalty.

A brand preference ladder is a staircase leading from non-usage to True Brand Loyalty. The context for the brand preference ladder is the audience for the brand. This ladder is a reflection of the strength of the customer’s commitment to the brand relative to competitive offers. Moving the customer up the ladder from commodity consideration to True Brand Loyalty can have a big impact on revenues and profitability.

PayPal stated that their strategy is aimed at building brand preference. And, building preference leads to True Brand Loyalty. True Brand Loyalty leads to quality revenue growth which, in turn, leads to enduring profitable growth.

Every brand desires sales. But, there are two kinds of sales: quantity of sales and quality of sales. Brands must build both. A lot of high tech brands focus on building quantity of sales, in other words gaining subscribers or daily users. Think of the ongoing streaming wars. The headlines are always about the number of subscribers. However, at some point, as Netflix is finding out, there is a limit to the quantity of subscribers. Quality of sales reflects building sales based on brand loyalty. Brand loyalty anchors quality of sales. This is why it is critical to move customers up the brand preference ladder.

Commodity consideration is the first rung on the brand preference ladder. With commodity consideration, customers view a set of brands as being basically the same. The customer is actually indifferent and is willing to consider any of these brands. “Willing to consider” is not the same as “I would put this brand on my short list of preferred brands.” Commodity brands deliver the very basics – the greens’ fees – of the category. In most cases, the only differentiator is convenience and price.

The next rung on the brand preference ladder is Short-list brands. Short-list brands are the small set of brands that are among the customer’s top three choices. There are reams of data indicating that most people tend to have a set of three brands; more than three brands being too many. Being on the customer’s short list is good, but not good enough to be a truly strong brand. It is better to be the preferred alternative within the short list.

The stage of building brand preference is next three rungs of the brand preference ladder: Top Three Preferred Brands, Second Choice and First Choice. Top Three Preferred Brands means each of the brands is a preferred brand. If your brand is one of three, your brand can only be picked 33% of the time. Second Choice and First Choice reflect the customer’s “ranking” of these brands. Obviously, you want your brand to be the First Choice.

A preferred brand is a favorite brand. Preference is a much stronger concept than satisfaction. For example, customers may be satisfied with a particular brand of printer. However, they may also be satisfied with two or three alternative brands. When shopping for a printer, they may default to price. Satisfaction is necessary but it is not sufficient. You may have a car that needs service. The service you receive is satisfactory. However, you may be unhappy with the car brand because it needed this service.

The ultimate goal is to move a customer from preference to True Brand Loyalty. Loyalty is not the same as frequency. Too many so-called loyalty programs build frequency but do not really build loyalty. Frequency can be bought by bribes. Bribes build deal loyalty not real loyalty. As many streaming brands now find, having a free trial period does not always translate to subscribership. Free-trial users may be going for the deal in order to watch special content.

True Brand Loyalty is based on a customer’s commitment that this brand is the best value, where value reflects the total brand experience (functional, emotional, social benefits) relative to the total costs (money, time, effort).

True Brand Loyalty is the highest rung on the brand preference ladder. True Brand loyalty brands are preferred even though there may be a price premium when purchasing. Imagine that a customer’s second choice brand costs 10% less than the first preferred, favorite brand. Data show that a truly brand loyal customer will still choose the preferred brand even though the second choice brand is 10% less. The ultimate goal is to increase the number of people who feel this way. Again, data show that a brand does need a lot of these true brand loyal customers. Having 10% of your customers as true brand loyalists can be very profitable. There are examples showing that 10% core loyalists can account for 40%-50% of sales. Several years ago, Macy’s noticed that it hard core loyalists in its loyalty program accounted for 49% of sales. 

Reviewing Snap’s latest earnings, The Wall Street Journal wrote that one of the reasons Snap is “faring better than Meta” may be Snap’s user preference. “For years now, Snap has touted its popularity among a younger crowd. That appears to be paying off now more than ever as Meta deals with attrition of some of its younger users. Snapchat daily active users grew 20% year-on-year and 4% sequentially in the fourth quarter.” The Wall Street Journal commented that investors, spooked by Meta’s ‘gloomy” results and outlook, punished Snap with a sell-off. “This time investors were wrong. On Thursday, Snap reported fourth-quarter revenue growth of 42%. This was 12 percentage points above the midpoint of its guidance and more than 10 percentage points above Wall Street’s estimate.” Preference is a big deal.

Additionally, The Wall Street Journal commented on Twitter’s recent unremarkable earnings. Somewhat bewildered by Twitter’s ad engagement strategy, The Wall Street Journal pointed out, “Twitter’s superpower is its highly engaged superusers. The people who love Twitter would probably tell you they can’t live without it.  But their value is in their loyal usage, not their ad engagement. Unlike those of Instagram, YouTube or TikTok, Twitter’s most active users aren’t idling on the network in hopes of relaxation or escape. They are there to work, to learn or to get specific information they need. That kind of use case doesn’t seem like the best place to expect customers to engage with more ads….”

At some point is a brand’s lifespan, there are no more costs to cut, no more ads to run, limited users to reach. The successful brands will be the ones that focus on the quality of sales and the True Brand Loyalty of users. True Brand Loyalty requires that brands build brand preference, moving customers us the brand preference ladder.

In a loyalty program report, Deloitte, the global business service company, wrote that a first priority for loyalty programs is to drive specific behaviors that will help brands reach financial, customer and brand objectives. Knowing which behaviors will move a customer up each rung of the brand preference ladder is a key to success. Or as Deloitte stated, “(Loyalty) is a tangible value creation lever… that is becoming increasingly essential across industries.”

Climbing revenues, brand value and profits require customers climbing the brand preference ladder.

Horizon Media, the media services agency, just issued a report outlining the latest trends to which brands must respond. Two of these trends, Restivism and Untact, create the platform for one of branding’s biggest challenges. Brands need to market to my physical and virtual shared experiences. Brands must address my simultaneous experiences in the real and in the ideal worlds. Both are me: one is the corporeal me while the other is the essence of me but not physically me. One is me and one is meta-me.

Untact is all about contactlessness. It is about QR codes, virtual reality, artificial reality and avatars. It is about simulated reality but a reality nevertheless. Restivism is all about putting my mental and physical health first, moving away from the demands of “work hard, play hard.” Restivism promotes napping, walking and exploring. Restivism happens in current society.

What we learn from the Horizon Media report is that brands should understand 1) the drive for self and communal meaningfulness while at the same time, 2) address the drive to escape to an alternate self in a different plane where life can be meaningful as well. 

There once was an Age of Me. The Age of Me was the flowering of the Boomer culture. It was self-focused and self-indulgent. The individual ruled. Now, there is substantive me and simulated me. “I am he as you are he as you are me, And we are all together” … this finally makes sense.

A primary piece of understanding market segmentation is that people have different needs based on different occasions. In other words, what brand you want is due to who you are, why you want this brand and in what context (how, when, where) you want this brand.

This idea still holds. The difference is that the who is now me or meta-me; the why is what I need for me or meta-me; the context is reality or metaverse.

In the real world, I may need to find brands that advance my physical self. In my alternative reality, I may need brands that enhance my virtual self. In my real world, I attend to myself so I stay sane in the game. In my alternate world, I am the game and can game the system.

Horizon Media highlights six other trends. Privacy, civic integrity, our focus on the mystical, our embrace of NFTs and the role of tech in saving the environment.  But, the idea that we can now be real and virtually real, with needs and occasions on both sides, is unique and challenging. This is more than meaningful moments and virtual test drives. As Horizon Media stated, these trends are designed to wake up brands to a new world where people are “…acting with agency in order to do better, be better and build better.”

Yes, but, these trends also point to the idea that we have two options: apparent and alternate realities. One option is current, real society; the other is simulation of reality. This theory owes a lot to French philosopher Jean Baudrillard who wrote Simulacra and Simulation in 1981. As Monsieur Baudrillard described the simulated environment, it is “the imitation of the operation of a real-world process or system over time.”

Some brands are already focusing on satisfying our me’s and our meta-me’s. Let’s look at the world of restaurants. For the substantial me, Chipotle makes Food with Integrity easier to obtain. Chipotle’s brand experience is heightened by its use of technology. Ordering is made hassle-free via its Chipotlanes drive-ups and its Digital Kitchen which only takes online orders. For the meta-me, Chipotle now has creative content for Twitch, Tik-Tok and Roblox, the online game and game creation platform, with its own currency Robux.

A restauranteur, Stratis Morfogen, is resurrecting the Automat concept for the digital world. It is a modern contactless experience. The old Automat required customers to buy food from vending machines using coins in slots. Mr. Morfogen has today’s technology in mind. Customers can order via kiosks or phones. Selections are placed in compartments waiting for pick-up. It is the epitome of Untact.

Then, there is the explosion of virtual brands. Virtual brands exist and do not exist at the same time. Virtual brands exist in ghost kitchens. In one case, a restauranteur has created “virtual turnkey brands” that restaurants can use to expand their offerings. Per Restaurant News, a lunch only virtual brand can now provide breakfast or dinner by using one of the turnkey virtual brands.

The meta-me environment goes well beyond eating. According to the Horizon Media report, we seek personal well-being in reality. We wish to enhance our physical self. At the same time, as reported in The Wall Street Journal, we can engage in metaverse exercise. “With a Meta Quest 2 headset and virtual-reality workout apps like Supernatural, FitXR and Holofit, you can burn a lot of calories in the metaverse. Just mind the motion sickness, and wear a sweatband.”

Where do you want to live? While we seek an easier home life in reality while learning to cope with the complexities of endemic coronavirus, we can also be owners of palatial real estate in the metaverse. Financial Times just wrote a long article about the millions of dollars that are being spent on buying virtual property. “For many homeowners, the Covid-19 pandemic forced a change in perspective on where they wanted to live. Why stay in a cramped apartment in the smoggy city when you can Zoom into your meetings from a country farmhouse or Edwardian manor or Martello tower?”

Where do you want to shop? Many brands from the “real world” are buying space in a virtual mall where they sell goods. As shoe brand Adidas stated, use the platform “… as a way of expressing our excitement around the possibilities it holds.”

What kind of sports fan are you? We can follow the NFL teams vying for the Super Bowl win in reality and we can experience soccer in the Etihad, the Premier League champions’ home stadium. Again, according to Financial Times, Sony and Manchester City FC are creating an “… accurate metaverse version” of the Etihad. Your avatar could visit for free, for now. Sony and Manchester City FC describe this effort “as an exercise in the elusive fan engagement that clubs so desperately want to get right….” In other words, expanding the fan base.

Farhad Manjoo, an op-ed columnist for The New York Times wrote that we are living in a world where the physical and virtual mingle. He wondered if our physical world “… can even function in a society where everyone has one or several virtual alter egos?” 

Who knows?

In the meantime, brands now face the challenge of marketing to multiple me’s in two separate existences. 

There is ego and alter ego. There is me and meta-me. 

Welcome to the Age of Me’s.

Even the best of strategies can take a hit when something unpredictable happens. This is why business leaders must be able to create and implement prearranged, deliberate strategies while being open to and able to evolve when disruptions happen or when crises alter the brand’s landscape. Having strategic dexterity is an imperative.

In April of 2019, Bed, Bath & Beyond hired a new CEO, Mark Tritton. Mr. Tritton inherited a troubled brand. Not only was store traffic down but there were serious concerns about the current CEO who Mr. Tritton was replacing. Mr. Tritton focused on generating and implementing a brand turnaround plan. His turnaround strategy followed the basics of what to do when faced with a troubled-brand challenge: 1) Stop the bleeding, 2) Focus on the Core and 3) Generate SMART objectives. 

 A turnaround strategy – as opposed to a growth strategy – is a business approach for a brand that is going in the wrong direction at an accelerating pace.  It is a plan of thinking and action that immediately moves to stop a deteriorating situation. It is short-term. It focuses on reinforcing brand strengths. What is working? Why?  How can it be improved? What is not working? Why? What do we need to do differently? 

The goal of a turnaround plan is to focus on the immediate requirements of the business. For a troubled brand business, an aggressive turnaround plan is not an option. It is an imperative. It is not a long-term plan. It is a short-term plan for business revival. It has specific short-term objectives. It has specific actions designed to achieve those specific objectives. It has a specific timeline.

Stop the Bleeding

All turnaround experts agree that the most immediate “must-do” action in a turnaround is to “Stop the bleeding.” Stop the financial bleeding and stop the bleeding of the customer base. The immediate goals are business survival and brand revival. Stopping the bleeding requires a set of quick, decisive decisions. One of those decisions is to determine the brand’s purpose and promise.

Stopping the bleeding requires the reallocation of precious resources and the reduction of allocations on expenditures that are not consistent with the redefined brand purpose and promise. Refocus resources behind those programs that pay. Restore positive cash flow.

With the development of an aligning relevant differentiating brand purpose and promise, all employees and stakeholders are aimed in the same direction. Alignment is a critical factor. Developing a purpose and promise requires a deep, clear understanding of who is the customer and what are the customer’s needs and problems.

Focus on the Core

The main core business must be protected and cultivated. Keep the brand heart alive and restore it to health. When the brand heart stops, the business dies.  The main core business is attracting and maintaining loyal customers. Not every customer is a valuable customer. Not every store is a viable store.

SMART Objectives

A brand turnaround plan must have a clear, measurable time-dependent objective. Vague visions, vague goals, vague hopes and vague promises will not accomplish what is needed to do to turn around the brand. Vague promises of vague objectives lead to vague strategies with vague commitment to vague outcomes. 

Be SMART. Identify:

• Specific purpose and promise
• Measurable objectives
• Ambitious and achievable 
• Relevant, clearly defined action plan 
• Time-dependent 

The Bed, Bath & Beyond turnaround plan had SMART objectives focused on stopping the bleeding and saving the core.  Mr. Tritton unveiled a three-year $250 million turnaround plan with four critical steps: 1) focus on fewer deals, 2) focus on Bed, Bath & Beyond “own” brands, 3) upgrade technology to provide real-time financial, supply chain, merchandising solutions, and 4) focus on remodeling those stores generating 60% of revenues, selling the non-revenue-generating stores. Additionally, Mr. Tritton instituted a share-buyback program. The brand bought back $225 million shares through February 2021. The plan was to repurchase $675 million shares over the course of the three-year turnaround. 

Based on a review of reporting, the one missing link in Mr. Tritton’s turnaround plan was articulating the relevant, differentiating brand purpose and promise of the brand. This is part of stopping the bleeding. A purpose and a promise generate alignment so everyone is rowing in the same direction. Galvanizing employees and all stakeholders is critical for success especially in a crisis. A purpose and promise also differentiates in the brand a relevant manner from its competitors.

The Bed, Bath & Beyond turnaround plan was in motion and on track until Covid-19 changed everything. Bed, Bath & Beyond fell behind.

Fewer Deals

One way to stop the bleeding is to rein in costs. In 2021, Bed, Bath & Beyond decided to stop a lot of the print circulars that generated store traffic. Similar to the switch to everyday low prices instituted at J. C Penney during the tumultuous tenure of ex-Apple store maven, Ron Johnson, Bed, Bath & Beyond stopped coupon-generated and flyer-generated deals. The idea was to become less dependent on dollars-off shopping.  Mr. Tritton also wanted price parity with its competitors. 

Retracting circulars was a minor disaster. Knowing the customer base could have avoided this kind of crisis. Print circulars and mailers have been mainstays of the brand for decades. Customers missed the circulars; store traffic dropped. When Mr. Tritton’s team recognized that circulars needed to be reinstated, Covid-19 paper supply issues along with labor constraints meant the brand could not print the circulars fast enough.

Own Brands

Although an initial expense, private label brands are money-makers if handled properly. The Wall Street Journal recently pointed out that private label brands, “… are no longer the cheap knock-offs you keep hidden in the back of the cupboard, but quite possibly the tastiest deals on the shelf.” Referring to Whole Foods’ reincarnation of the 365 brand and Target’s innovative private label creations, The Wall Street Journal stated private label brands are “… casting off their bland reputation and transforming themselves from dull to desirable.”

Mr. Tritton comes from Target where own brands are an essential, profitable revenue source. Adding more private label brands became a priority for the Bath & Beyond brand. In addition, Bed, Bath & Beyond created a partnership with Kroger Co. whereby Kroger will sell some of the Bed, Bath & Beyond private label offerings.

Mr. Tritton indicated that the own brand portfolios would consist of products in home décor, laundry, bathroom and kitchen, according to Bloomberg BusinessWeek. 

Own brands require manufacturing and supply. Manufacturing and supply have been hard hit by coronavirus.

Upgraded Technology

From the standpoint of both staunching the hemorrhaging of cash and making life easier for customers, new technologies is a winning issue. 

According to retailtouchpoints.com, Bed, Bath & Beyond’s technology upgrade program is designed to “… support improvements in merchandising and inventory management, product lifecycle management, retail space planning and optimization, the launch of additional private-label brands and real-time tracking of merchandise fulfillment with the supply chain.” The technology changes are also designed to make shopping easier for customers.

One of the lessons of Covid-19’s supply chain problems is that real-time inventory practices create empty shelves and deficits in other critical items necessary for manufacturing. In its most recent earnings call, Bed, Bath & Beyond admitted that its poor quarterly performance was due to a “… compromised customer experience” when customers could not find what they wanted on its shelves. As Mr. Tritton said, there was demand but limited availability.

Bed, Bath & Beyond stated that the supply chain issues cost the brand $100 million at the November 2021 end of quarter. The December results were equally bad.

Focus on the Core

Keeping core customers happy and loyal is essential in a turnaround. But, not all stores are magnets for customers. Bed, Bath & Beyond had a lot of stores. It turns out, however, that not all of these stores were profitable. The brand has shut, and continues to shut, stores. Bed, Bath & Beyond stated that it would focus on remodeling the stores that generate about 60% of revenue. 

In May 2020, according to USA Today, Bed, Bath and Beyond had 955 namesake stores in the US. Closing 200 stores is expected to save the brand anywhere from $250 and $350 million annually.

Upgraded technology has focused on pandemic-fueled customer needs such as e-commerce, curbside services, in-store pick-up and same-day shipping. Of course, if there is limited product availability, these services become moot.

Buybacks

As for the share buyback program, Mr. Tritton said it would end by March 2022, two years ahead of schedule. The brand’s share price has been turbulent. Bed, Bath & Beyond was one of the brands caught up in the Reddit-meme frenzy in 2021. This coincided with a significant round of share buybacks: Bed, Bath & Beyond said that it paid double for its shares during this period. With the buyback program ending, The Wall Street Journal opined that with shares “back to Earth,” the brand can now focus on store shuttering, store remodeling and marketing.

Bed, Bath & Beyond is not the only brand to be hit by supply chain issues. It is just that Bed, Bath & Beyond was fairly frail for several years. And, the executive team may not have been as flexible as necessary for the ravages of the pandemic. Mr. Tritton has said that the turnaround plan changes have been “difficult” to implement with coronavirus still rampant. Some analysts point out that the turnaround troubles at Bed, Bath & Beyond are of its own making.

Bed, Bath & Beyond has a challenging set of competitors. Target, Walmart, Amazon, HomeGoods and its parent T.J. Maxx. This is why Bed Bath & Beyond needs to figure out what will be the relevant differentiating brand promise. Having a relevant differentiating purpose and promise are drivers of any coherent turnaround strategy. 

The Bed, Bath & Beyond turnaround plan had most of the elements necessary for success. Being able to alter pieces of the plan to demonstrate dexterity in times of crisis might help. Let’s hope we do not lose another retail icon.

Rather than make a list of 2022 predictions, here are five brand opportunities for brand leaders. Think of this as a list of “Wouldn’t it be great if…” scenarios.

1. Wouldn’t It Be Great if There Were A Brand Offering Accessible Luxury Jewelry Again?

According to The Wall Street Journal, Tiffany’s French owner, LVMH, wants to steer the Tiffany brand up-market abandoning its position as an American affordable luxury experience. LVMH wants Tiffany to compete with Chanel and Hermes. Although Tiffany’s has always sold expensive jewelry, its line of silver jewelry made the brand accessible too many.

The American jewelry marketplace is particularly bifurcated with high end foreign brands such as Cartier, Van Cleef & Arpels and Swarovski on one end and mass market alternatives such as Zales, Kay’s and Jared’s on the other end.  Tiffany’s, with its iconic blue boxes, gave many people an opportunity to share in the luxe of high end brands while not blowing their life-savings. 

There is a concern that a brand cannot be both luxury while being accessible. Being a luxury brand means that the brand must be exclusive and rare.  In fact, a professor holding the LVMH-ESSEC Chair at ESSEC Business School wrote about the fine line between maximizing accessibility and rarity. Tiffany had, in certain ways, become democratized while still claiming a luxury image. This position of accessible luxury does not appear to be LVMH’s vision for Tiffany. The new focus of the brand, according to the press, is going to be more towards the classic definition of luxury, “an inessential, desirable item that is expensive and difficult to obtain.”

Now, there is marketing hole – opportunity – where Tiffany’s stood. 

Wouldn’t it be great if there were another brand that could step into Tiffany’s space? Wouldn’t it be great if there were another brand that could capture and promote accessible luxury?

2. Wouldn’t it Be Great If Charging Stations Were As Ubiquitous As Gas Stations?

Car companies are focused on manufacturing electric vehicles. This is great. But, why is it that the only charging station near me is at the Whole Foods Market five miles away?  Yet, on every intersections’ corners, there are at least two gas stations. If I wanted an EV, I would not be able to charge it for my commute. Bummer.

What if the big oil companies – all of which have made commitments to become “greener” – decided to turn half of their gas stations into charging stations? If these behemoths want to be perceived as credible eco-conscious entities, focusing on helping us be EV drivers would be fabulous.

This would require a huge re-alignment of resources. But, with all of their resources and R&D, imagine what could happen. What if these brands re-directed some of their innovation to electric vehicles? Instead of seeing themselves as purveyors of gas and oil, what if they reimagined themselves as purveyors of energy?

Online news brand Newstex information indicates that the legacy oil companies are investing in charging stations, but it is not a priority. Why? The fear of cannibalizing the core business. A charging station manufacturer executive said that even if an oil company were to massively invest in charging stations, “… the cost of lost revenue and shareholder value” would overwhelm any monetary benefits from electrifying. 

There are some bright spots outside of the legacy oil companies. In Colorado, three oil and gas companies merged to create an entity that focused on solar and renewable energies. This entity is thinking about local charging stations as well.

The bigger news is that European oil companies such as BP, Shell and Total are already investing in charging stations. These moves are not altruistic, though: European governments are determined to eliminate gas- and diesel fueled-vehicles. 

Shell acquired an American charging station company, installing its first US charging station at Boston’s Logan Airport. Chevron installed charging stations at five gas stations in California. But, according to reporting in The Arizona Sun, ExxonMobil, the biggest US oil and gas company, is not particularly interested in charging stations. Its CEO stated publicly that he just does not “get it” as charging stations use coal-generated electricity.

Wouldn’t it be great if half of our gas stations became charging stations?

3. Wouldn’t It Be Great if Automotive Brands Recognized That It May Not Be The Dealership Showroom That Is The Problem?

The New York Times reports automotive luxury brands are creating “experience centers”. The hope is that changing the space where you buy a car will change your mind about buying a car in person. Online car buying from brands such as Carvana are eating away at dealership sales. As The New York Times cites from Kelley Blue Book, “…consumer satisfaction with car shopping has reached an all-time high in recent years, as the pandemic shifted more of the experience away from dealerships, digitally or elsewhere”.

Turning the luxury brand into a positive place to hang out is not a new idea. Many automotive companies took the Pine and Gilmore 1988 article to heart. Mr. Pine and Mr. Gilmore wrote a seminal Harvard Business Review article called “Welcome to the Experience Economy”. Its basic premise was that customers want to be immersed in the total brand experience through both sensory and functional benefits.

Changing the atmosphere in which customers buy cars is needed. Dealership experiences can be dreary even for luxury brands. Automotive brands hope customers will immerse themselves in the brand’s total brand experience. (Apparently, these experience centers are ways in which the brand can control the brand experience from afar rather than leaving the brand experience up to the dealership.)

If you are in the market for a non-luxury vehicle you will still be taking your chances at the dealership. At the dealership, the comparison with online auto shopping is stark. Buying and selling a vehicle on Carvana is painless. Financing is painless. Charges that dealership customers pay are not an issue. Everything is taken care of including registration and license plate, even if you are keeping your previous plate.

Will experience centers work? Cadillac tried one in 2016. This was when Cadillac moved to New York City, abandoning Detroit. It took just three years for the Cadillac experience center to close down with a lot of embarrassing Monday morning quarterbacking. General Motors moved Cadillac back to Detroit.

Whether you are lolling at the Lamborghini Lounge or participating in a Korean tea ceremony at Genesis House (Hyundai’s luxury brand), it is all still about buying a car, albeit a luxury vehicle. Perhaps luxury car purchasers are a different breed of car buyer. 

Experiences are magnetic. The question is whether a lack of the car’s experiential essence is the reason people have problems with buying a car in person rather than online. Buying a car on Carvana is painless. 

Wouldn’t it be great if the automotive companies recognized that it may not be the place in which the car is sold that is the driving problem with dealership sales? Wouldn’t it be great if the automotive companies understood that, rather than place, it is the process, the pressures and the practices that are the problems?

4. Wouldn’t It Be Great If Brands Recognized The CMO As The Voice of The Customer?

The CMO is an endangered species. You can see this in the way enterprises shunned the title CMO. Many organizations changed the name CMO to new titles such as CSO (Chief Synthesis Officer) or CCO (Chief Customer Officer) or CBO (Chief Brands Officer). 

CMOs have themselves to blame for the declining reputation and respect for their CMO role. The CMO role devolved into focusing on marketing communication tactics instead of focusing on developing marketing-driven business strategies. It is no surprise then that some wonder if the CCO is simply the CMO in disguise.  Did changing the title fix the inherent problems that stem from fascination with managing the fractionalization of media channels? Changing the job title was never the correct answer. 

Surprise: companies are ditching the CCO title. Apparently, the CCO title affected short-term issues but did not address the long-term issues that are critical to brand survival. One of these is being the Voice of the Customer. 

The CMO’s role is to be the Voice of the Customer. It always has been. The CMO represents an objective, unbiased view of the customer to the organization. The CMO provides a single, corporate-wide center to collect, disseminate, and synthesize customer knowledge and requirements, while facilitating corporate-wide learning. The CMO is responsible for influencing the development and implementation of customer-driven brand-business strategies. The CMO’s responsibility is to be the leading C-Suite influencer addressing the entire customer experience, not just communications to the customer.

The CMO must be the business leader responsible for generating, supporting and activating a customer-driven focus within the organization.  Brands must revitalize the CMO role so the function:

• Helps define the strategy for high quality growth
• Demonstrates contribution to the bottom line
• Focuses on achieving organizational alignment behind a common brand- business purpose and direction
• Helps define the Brand-Business priorities
• Is responsible for building and managing the Brand-Business plan 
• Knows more about the customer than anyone else in the organization… and is the customer’s advocate
• Drives true customer-insight-focused growth strategies and innovation
• Develops and implements a Balanced Brand-Business Scorecard
• Leads customer-driven innovation through providing insights into customer needs, and problems 
• Develops the price-value strategy
• And, takes responsibility for brand communications, internal and external

Brands must re-form and transform the CMO from a marketing communications role to a brand-business leadership role.  Shame on brands when often the first questions for a new CMO are, “What will the new advertising be? Will there be a new slogan? Will there be a new advertising agency? What is our new digital strategy?”

Changing the CMO title was not the solution. Changing the role is the challenge. It is not enough to be “at the C-suite table.” It is important to revitalize the role when at the table. 

Wouldn’t it be great if 2022 were the year brands revitalized the CMO role, reasserting the CMO as the Voice of the Customer? 

5. Wouldn’t It Be Great If Brands Doubled Down on Building Brand Loyalty?

Coronavirus upended customer shopping behaviors and attitudes. Key to these changes are supply chain issues. Shortages of favorite brands directed customers to alternative brands. A survey from Bazaarvoice indicates that 39% of those interviewed said they were forced to switch to an available brand. Eighty-three percent (83%) of these customers said they intended to stick with the new brand.

This does not mean that brand loyalty is dead. What this means is that brands need to be more flexible and focused on satisfying their customers.  Many cite Chipotle’s ability to immediately leverage its digital platforms for ordering and marketing as a terrific example of adaptation in action that enhanced customers attachment to the brand.

Coronavirus made brand loyalty more vulnerable while at the same time more secure. Brands that were out-of-stock or unresponsive to customer problems and needs became vulnerable brands. Brands investing in knowing their customers brands and going out their way to be pandemic lifelines for customers became favorites. Brands providing data-driven personalization and interactions were able to generate and/or maintain brand loyalty. 

In an interview, one of Groupon’s co-founders said brands must continue to both acquire customers and “… engage them… building brand loyalty.” He added: “I think businesses are going to be able to weather the storm because of the support they’re getting (referring to stimulus packages). But, the ones that are not thinking about the long-term relationships are just going to burn through any financial support they can get and they’re going to burn out as a brand regardless.”

Brand loyalty takes time. It is easy to lose. But, it is difficult to rebuild. Building brand loyalty is not an “in-the-year, for-the-year” action. Brand loyalty is not like Amazon Prime. Brand loyalty does not happen overnight. Building brand loyalty is long term. It takes time. This means brands must continue to invest in building brand loyalty even during these difficult times.

Brand loyalty is alive and well. Over the past two years, people switched brands but have become attached to the new brand. Wouldn’t it be great if brands invested heavily in building and maintaining brand loyalty?

Happy New Year!