It seems that nearly every conversation that transpires between manufacturers (brands) and retailers includes some acknowledgement of the need to build customer loyalty. The manufacturer wants to build shopper loyalty to their brands and portfolio. The retailer wants to do what it can to ensure that the shopper chooses their stores and banners over other options. While their goals overlap, they are also not completely shared. What may benefit one party at times, may not be in the best interests of the other. It therefore becomes standard practice to blame the other for shortcomings in building loyalty with shoppers/consumers.
What Is It?
The CPG/Retail industry defines loyalty in ways it can easily measure (share of stomach, share of spend,purchase frequency, etc.). However, loyalty is an emotional commitment first and a behavior second. As an industry, we tend to focus on the behavior and assume it represents the feeling or emotion. Yet, what is missed is the level of the feeling shoppers’ have that they are making “the best choice available” – but still eager to make a change should a more suitable choice become available. In effect, the shopper may feel they are “satisficing” given their options, but far from loyal. Loyalty is not the exclusive domain of logic or able to be extracted through observation of behavior. When successful, loyalty can lead to advocacy for a brand/retailer with others. It provides opportunity for quicker forgiveness should mistakes be made. A recent article that appeared in Colloquy addressed the emotional component of loyalty by first looking “within” our organizations to assess engagement levels before expecting engagement from shoppers. As the article’s author maintains,” Positive emotions such as trust, respect, enthusiasm and delight almost always support this kind of commitment.”
How Do We Do THAT?
Our current business environment includes a certain amount of “commoditization” of products and services. There is little innovation or tremendously unique offerings that remain singular for too long before a competitor meets that capability. Therefore, the ability to hold and keep a customer through all of the attempted incursions from competition represents a substantial opportunity (especially when considered over the lifetime of a shopper’s purchasing career for frequently purchased categories!). However, according to the article, there may be an emotional MAGIC that needs to be implemented internally before expecting shoppers to respond.
How MAGIC Works
Each letter within the word “magic” represents a different component required to build better engagement and loyalty.
Meaning: There has to be clarity of purpose and a shared focus or vision that everyone within the company is pursuing. All too often, there are silos within companies or competition that is destructive (refusal to share information, conflicting objectives, lack of sharing of resources, etc.).
Authenticity: We need to “walk the talk.” Every company shares in their annual report their mission, goals, purpose, values, etc. However, walking around most companies and observing interactions rarely mirrors what the company stated culture would lead you to believe about them. The company that purports to be about certain standards must be aligned in both their statements and their behaviors.
Growth: Does the company have a direction it is heading? Is their a sense of progress, or are people stuck in neutral and stagnant? Is the future clear or muddled?
Impact: Companies can only succeed if they are achieving and using their resources for achieving their stated purposes. Being able to deliver on current obligations and provide consistent and reliable results is key to inviting engagement from internal employees AND shoppers.
Collaboration: We are inspired and drawn to engage in cooperative relationships that recognize and value the contributions made by each party. Companies that attempt to create a sameness or oneness within their organization risk losing the diversity of ideas from which innovation can spring.
Before you can pursue the engagement and loyalty of shoppers, you must address the above components (MAGIC) internally. If there is a disconnect between expectations and performance, it is time to reassess our approach to engaging our employees. Engaging employees emotionally first will allow for more impactful engagement with shoppers.