The recession in 2008 saw an immediate tightening of spending on the part of the average consumer. Brands that were enjoying a large and consistent customer base suddenly found their interaction with said group to be at best, sporadic.
This led many businesses and corporations to question the value of brand loyalty in today’s marketplace, and more importantly, if they held any. What many businesses found was that their previous source of consistent profit was not acting out of loyalty, but rather, out of habit.
This habitual spending is probably more commonplace than we realize. In today’s globalized market, businesses lack the personal accessibility which is so iconic in the American landscape.
For the average consumer, there is no longer a community of locally owned businesses; there is no barber who has cut a generation of the Smiths’ hair, no grocer who employs familiar bag boys, and subsequently, no personal incentive to invest loyalty within a business.
The business has ceased to become any more than a middle man. This is not a particularly revelant statement, but further exploration within it can shine some light on the nature of business in our modern world.
Building Brand Loyalty & Shared Value
There are two ends being sought here, a separate one for each involved party.
The business: maximizing profit.
The consumer: maximizing utility, resulting happiness from the product.
When these two end goals do not match up, then the significance of the interaction with a company ends with the transaction. This encourages nothing but a relationship of convenience and creates habit-driven consumers. Habit-driven consumers are fickle, and will not allow you the security you want as a business-owner.
Let’s think as a consumer for a second, something which shouldn’t be too hard unless you happen to be reading this post from Walden pond. Viewing a business as merely a facilitator for a consumer’s desire for something transforms the business from an entity with any independent value into an entity whose value is totally defined by the value of the desired end product, the end product being any sort of material good, or general service.
If something exists to only achieve an end, then all value of that something is given by whatever the end may be. If your interaction with the consumer is limited exclusively to transaction and all its involved processes, your business will most certainly hold very little value for the consumer.
In a world of economically rational individuals, there is no escaping this definition of “means and ends” within the interaction between consumers and businesses. However, there is a way to use this relationship dynamic to increase the value of your business in an entirely symbiotic way.
Make the ends which you as a business hold align with that of your consumer in a way that increases the significance of the end in whose pursuit you’re involved; create Shared Value.
If your business can help facilitate a customer’s desire for an end which has a much higher value than a usual transaction, the consumer will place a higher emphasis on who is the facilitator of their desires, thus generating brand loyalty.
Offering some sort of social utility in addition to a personal one can help do just that. A social utility which is attributed to a higher calling offers a benefit to your services which is intangible, and therefore can help give your business an edge which can’t be overcome with the newest product design or features. An abstract ideal is un-quantifiable and thus unable to be subject to simple side-by-side compare and contrast.
Traditional businesses’ have the exclusive goal of profit; this often marginalizes the needs of the consumer. When there is Shared Value, any improvement to a business is an improvement to the consumer, as long as the improvement does not violate the parameters of the Shared Value.
An increased focus on improving the lives of the consumer beyond simple products offered can be an effective tool for increasing brand loyalty and reputation.