In our fast-evolving online world, brand sovereignty is under threat in ways that most brand-owners are failing to grasp. With intermediary deal makers, discounters and price comparison sites, brands must be more authoritative and self-confident than ever, standing up for themselves and creating their own agendas. Yet most seem like rabbits transfixed by the digital headlights.
Direct Line is one of few companies that refuses to be intimidated, making a virtue of the fact that customers won’t find it on comparison websites. Why aren’t more brands following the Direct Line example and establishing their own strategies to deal with the developing dangers?
Everyone recognises that the online world has put consumers very much in control – price comparison websites, cashback sites, voucher code sites, Foursquare, Groupon, Living Social etc. Yet these services are fast contributing to something even bigger, to a quantum shift in behavioural change.
They all have business models that require consumers come to them again and again, an objective they achieve by offering a constant stream of deals and discounts. With services like these becoming the new norm, we inevitably think less about brand and more about offer. This was confirmed by recent research from Valassis, which showed that 37% of consumers are looking out for promotional offers ‘more than they were a year ago’ (28% in June 2010).
The onset of recession may have created a breeding ground for this behavioural change and, yes, real incomes are presently shrinking. But these things are not the sole drivers. We have come to celebrate our behaviour – proudly declaring how smart we are at getting the best deal. These attitudes are revealed in the Valassis findings, with 33% of AB shoppers looking out for promotional offers more than they were a year ago. These changing consumer attitudes are proving every bit as significant as household finances; 40% of those in full-time employment are on the hunt for offers more than they were a year ago, whilst only 34% of those not working are doing the same.
With every new online service that reaches critical mass – Google Offers is the latest entrant – comes a further challenge to brand power. Can brands win in such an environment? It will certainly be difficult to build walls of brand equity high enough to repel the deal making barbarians at the gates.
Some brands are adopting the ‘if you can’t beat em join em’ philosophy. They are buying into special online sites that at first glance are very tempting; places where brands gather to deliver their own couponing deals or promotions. But again, these are places consumers deliberately go to in order to find the latest brand deals. These are ‘destination sites’, driving repeat visits by a range of offers, discounts and coupons across a wide selection of brands. So it follows that they too encourage consumer default to the best or latest deals, adding to the very behavioural change that in the longer term cannot be in the best interests of brands. Brands that are playing in these spaces may be winning short term sales at the expense of long term loyalty; they may be shooting themselves in the foot.
Safety in numbers is an illusion, joining the herd a mistake. Brands must increase their share of voice, reminding consumers what it is they offer, how good they are, why it was that consumers used to buy them in the first place. That’s not to say brands shouldn’t make their own deals or offer discounts. But they must do so via their own communication channels, while setting agendas that play to value for money rather than price.
The answer is a combination of good brand messaging whether on-pack, online, mobile or other direct channels linked to branded activation tools, tools that allow the brand to present its own deal or discount on its own terms. Take security enabled online couponing for example. Such a tool enables brands to provide offers to a wide range of customers – but they will always be customers that are invited to engage with the brand in some way to obtain the offer.
With consumers defaulting to the latest or best deal, brand loyalty is under genuine threat. So at the simplest level brands could easily reward existing users with a money-off-next-purchase coupon promoted on-pack – yet printable via the brand’s own website. A brand that puts a coupon offer on its website is bringing the consumer into its own domain; it can engage with them, it can communicate the brand story more fully and in return for the coupon, can garner some valuable information. Things needn’t stop there either. Customer acquisition objectives can be met extremely cost effectively by partnering with social networking sites. For example, using Facebook’s data and targeting systems brands can readily reach out to precisely the demographics that most interest them.
It’s time for brands to take matters into their own hands before they lose their influence – and brand shares – for good.
Matt Butcher is a director of PIMS-SCA
