For brands, the concept of ‘loyal customer’ has become a myth. Customers are being tapped again and again. A disengaged customer is targeted as a future potential. But isn’t that a waste of resources? BestMediaInfo.com talks to experts to figure out where this chase ends, if it ever does and how important it has become for brands not to be hooked to the traditional sales funnel
Relationships today—whether it’s between people or employers and employees—are no longer permanent. We find relationships breaking quickly over a misunderstanding or lack of judgement, but very few out of those realign again. This is because we live in a disruptive world where change is constant. The same principles can be applied to the world of consumers, where a consumer switches to another brand, expecting it to deliver better benefits, and later realises that the earlier brand was much fulfilling.
Maybe a decade ago, marketers believed in the traditional sales funnel of customers but today they certainly think of a sales funnel where a customer has to be engaged even if he or she chooses to switch to another brand. The customer has to be tapped again, and a disengaged one is targeted again to become a potential one. So, would it be right to conclude that a customer’s journey never ends?
This gives rise to a question of wasting a brand’s resources in terms of money and marketing efforts. BestMediaInfo.com talks to a few brands and experts, who discuss the importance of understanding the modern trade sales funnel, when and where a marketer should focus and make a wise investment choice. They explain why a customer journey has become a perpetual cycle that never ends.
“The relationship between a marketer, the brand and the consumer continues forever. The customer journey never ends. Even when a consumer exits a category, they still remain a brand evangelist. While the consumer is on this journey, the brand choices may change over occasions, over a period of time due to evolving needs. Marketers need to understand this and offer a portfolio of choices to consumers,” said Gurpreet Singh, Head (Marketing), United Breweries.
“After the purchase or service of the brand, customers create either a positive advocacy about the brand, or a negative one. And brands cannot turn a blind eye to this. So this journey becomes a perpetual cycle, which continues throughout. Ever since the concept of customer loyalty has got lost, marketers are hooked to the modern trade funnel. And for a disgruntled customer, it is better to set him aside and move on to going to a newer customer, for better return on marketing investment,” said Sandeep Verma, Country Head, Bayer Consumer Health.
Marketers still have to attract leads, generate interest and prompt decisions, but not necessarily in that order, and not using the same tactics. Leads now inform themselves through reviews and content, and, after they’ve become consumers, they go on to advocate and act as brand evangelists. A marketer’s job at every stage is to delight those potential customers. The key change over the years has been in the form of digital and internet connectivity through mobile operators. This has made a lot of the conversations real-time and two-way. Many marketers struggle with this as they are far too accustomed to talking to consumers and not adept at handling consumers talking back to them. From 'advertising to a consumer' to 'engaging with a consumer' is a key shift to marketing and very often a key to success. And, it’s not either or. It’s doing both, Singh added.
Many marketers consciously choose to focus on either end of the marketing funnel — building awareness or generating loyalty among current customers. There is a need to be much more specific about the touch points used to influence consumers as they move through the initial awareness and consideration to active evaluation to closure. By looking just at the traditional marketing funnel’s front or back end, companies could miss exciting opportunities not only to focus investments on the most important points of the decision journey but also to target the right set of consumers.
The need for the modern trade funnel
“Earlier it was all spray and paint kind of marketing. It was all about mass communication that used to happen from a brand’s end to potential customers or the targets. Brands would reach out to that segment to convert them into intent to purchase. The whole customer journey used to be around awareness, interest, consideration, intent and purchase. Now the customer thinking process has changed because they have sources of awareness at each level of the decision funnel. Even if a product has come into a customer’s consideration, he or she will still evaluate even at the point of purchase. So unless the brand re-targets the customer again, it can lose out on all the previous marketing efforts. A customer can drop out at any stage,” said Verma.
Verma said the contribution of modern trade to business is still on the lower side, and brands today in India are surviving with the simple traditional spray and pray kind of marketing. But going forward, if brands are targeting the more discerning customer and that too via digital, they need to shift to the modern trade funnel. As soon as the word digital appears in media lexicon, brands need to get into the new sales and marketing funnel with a revised role of marketing and sales.
In developed countries, modern trade formats contribute more than 90% of the outlets and there will be time when that will happen in India as well. Modern trade also delivers on the shopping experience for consumers, which does not happen in the case of traditional sales.
Apart from that, the concept of a ‘loyal consumer’ has become a myth. Consumers have a choice and on different occasions will chose different brands. Marketers need to therefore ensure that their consumer outreach programmes, largely defined in terms of ‘marketing’, reaches out to the consumers as many times as required depending on the product or service category one operates in. There is also the need to acquire new consumers who have never tried the brand or to reacquire a consumer a brand has lost over a period of time. These three broad buckets define the leaky bucket and therefore the brands need to recruit consumers on an on-going basis and at a pace and scale that will result in a net accretion of consumers. This is true for both established and new brands, for there is always the next newer, cooler alternative available to them.
So, who should brands exactly chase in the funnel?
A marketer’s first priority is their current strong markets and consumer segments. In order to win new customers, current strengths should never be compromised. Retaining current customers is a cost-effective affair than to win new ones. Hence the markets of current strength should receive highest investments, said Saumitra Prasad, CMO, Kokuyo Camlin.
Kunal Dubey, Country Head, Dentsu India Slingshot, explaining the modern trade funnel, said that for a longer period of time, brands had been operating only on three buckets—at the top for awareness, mid-section around the perception of the brand, and the bottom about conversion.
“I think the crisis for a long time, where the brands have been seeing, is only mid-funnel. And it's about the perceptions that matter the most. For any brand spends, they will either spend a lot on the top of funnel to create awareness or may be a start-up, which spends a lot on conversion. Mid-funnel is where the crisis exists in today's world, which is all about the perception that a user has about the brand. That is where the effort is least by most of the brands in today's world. Because it is only about creating experiences that really help the audiences to understand your brand, where it truly stands for and how it can impact the lives. Brands need to start focusing on the mid-funnel where the perception matters, until you're a breakthrough company like Apple or a category creator itself like e-bay. Gone are the days when a typical top and the bottom funnel matters so much more. For the long run, brands really need to heavily invest in the mid-funnel for your brand to be a lot healthier and purposeful.”
Verma pointed out that since customers are loaded with too much of information about the brands, depending upon the low, high involvement category of the brand, brands need to figure out what level of information they need to give to the customers. It is critical for them to identify which are the sensitive parts of the funnels where they need to invest in.
“I always would want to chase consumers who are already disposed towards my brand. So I would term them as the low-hanging fruit. There’s a higher probability that I can let this section to consume more of my products. Somebody who is not interested in my brand, or where my brand has not been able to appeal, which means there is some strong disconnect between my brand and this uninterested customer; it is far more expensive to go behind such a customer. The wise investment should be made either for the customers who are positively disposed, or at least neutral, somebody who is negative, is a very tough nut to crack,” said BK Rao, Senior Category Head, Marketing, Parle.