The history of marketing has seen several eras, from mass marketing through direct marketing and digital marketing to data-driven marketing. Customers and their loyalty change as marketing strategies and resources change. Today, consumers have more devices and privacy-protecting tools. They also expect a sophisticated customer experience. If you don’t meet these expectations, your customers will go to someone else who does. According to Forrester Analytics, 54% of consumers are willing to try new things in any market.
Marketers have failed in their attempts to deliver high-quality experiences and data-driven marketing. In many cases, marketers’ attempts to create data-rich profiles of customers led them to hoard data and lose customer trust after the extent of profiling by some companies became public. (See Facebook and Cambridge Analytica). Consider that marketers, recognizing the rise of values-driven customers, tried to appeal with messages that focused on values, sometimes at the expense of authenticity. For example, a car dealer pulled advertising from a TV show they hadn’t purchased media for years to protest a controversial issue.
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Why did marketers’ attempts to become customer-obsessed backfire? One of the many challenges in stabilizing your client base is that people are not numbers on a spreadsheet or targets on an ad-tech platform. They are complex human beings. Just when it seems impossible to overcome the challenges, a fundamental fact about customers is revealed that can give marketers some comfort. People’s basic needs and wants have not changed. They want to express themselves and their individuality, they long to belong to a community, and they desire tools that make life easier and better.
In today’s society, these needs are met differently. As polarization spreads, the desire to belong has fueled tribalism. You can find proof of today’s boycott threats by searching Twitter. We know that consumers will be actively promoting brands they love and actively participating with them, but their loyalty is waning. Forrester’s Customer Experience Index reveals a 20-point change in customer sentiment when they judge the overall quality of service provided by a brand and feel rewarded for their loyalties. Less than half of customers score the majority of brands as rewarding their loyalty.
Marketers who fail to grasp the nuance and complexity of changing customer characteristics lose their customers’ trust. Direct-to-consumer brands are more agile and responsive to the needs of customers. DTC brands are proud of their direct relationship with customers, and they often provide rich personalization using zero- or first-party data rather than inferred information. Some brands have values-based missions, like Parachute’s involvement in the United Nations Nothing But Nets Program. Every Parachute bed purchase provides mosquito nets for families living in areas at high risk of malaria. These benefits have led to consumer adoption and trial. According to Forrester, two-thirds of US consumers aged 18-34 have purchased at least one DTC product.
DTC challengers are not only a way to observe the changing market, but they also offer a chance for large brands. The rise of purpose-driven ecosystems is likely to embed tribalism further. Still, consumers are also increasingly in control of their own consumer identities, as seen by the Personal Digital Twin. Segmenting customers into tribes, therefore, won’t help brands. Marketers should instead focus on how to serve customers’ individual needs expressed in their terms through innovative AI technologies and curation platforms rather than just jumping on the latest technology bandwagon.
