NEW YORK -- The combination of consumer empowerment via the internet and social networking, ever-inflating consumer expectations and experience with price promotions and discounting have finally reached saturation-levels, triggering a tipping point in the branded world, where emotional engagement is the dominant driver of purchase decisions and brand loyalty, said brand and customer loyalty and engagement consultancy Brand Keys.
The "indisputable primacy of emotional engagement" with successful brands is the critical finding in the 17th annual 2013 Brand Keys Customer Loyalty Engagement Index (CLEI).
"It should come as no any surprise to marketers that consumers seek greater levels of emotional engagement with products and services they stick with and make profitable," said Robert Passikoff, president of Brand Keys, New York. "The rule of thumb should be to view the decision process to buy a brand--and then buy it again--as more emotional than it is rational. Estimates for most categories report a 70:30 ratio."
Brands--products and services that consumers do not see as being freely interchangeable--that appear at the top of the 2013 year's survey, include Samsung, Amazon, Hyundai and Ford, all exhibit much higher delivery against emotional category engagement drivers.
"You need to identify real emotional engagement drivers. ... And if you look at what drives consumer emotional engagement in a category, it's clear that the rational stuff is but table-stakes," said Passikoff. "If you don't have a handle on the emotional side of the purchase and engagement process, you might as well spend your marketing budget on coupons and promotions."
Brand Keys assessments are based on an independently validated technique that fuses rational and emotional aspects of the categories to identify the drivers for the category ideal, and to determine how well the brand meets or exceeds expectations consumers hold for the ideal in the category.
"Some categories have become so commoditized that--though consumer are aware of their names--they have lost any sense of 'brandness,' and become so small in terms of the actual number of national providers or are becoming technologically obsolete," said Passikoff, that it's brought this year's CLEI assessments to 54 categories and 400 brands."
Below are brands with highest levels of consumer engagement in their respective categories (percentages indicate the emotional engagement strength achieved versus a consumer-generated, category-specific ideal, calculated to be 100%):
[Editor's Note: brands listed include those directly or indirectly related to the convenience channel; click here to view the full list, including rankings within all categories.]
- Beer (Light): Coors Light (89%)
- Beer (Regular): Coors/Sam Adams (90%)
- Breakfast Cereal: Cheerios (91%)
- Casual Dining: Applebee's (82%)
- Coffee; Dunkin' Donuts (90%)
- Credit Card; Discover (94%)
- Diapers: Pampers (95%)
- Gasoline: Shell (89%)
- Natural Food Stores: Whole Foods (93%)
- Packaged Coffee: Dunkin' (95%)
- Pet Food (Canned) for Cats: Fancy Feast (93%)
- Pet Food (Canned) for Dogs: Cesar (94%)
- Pizza: Domino's (84%)
- Quick-Serve Restaurants: Subway (95%)
- Retail Store (Discount): Walmart (89%)
- Soft Drinks (Diet): Diet Coke (89%)
- Soft Drink (Regular): Coke (90%)
- Toothpaste: Colgate (94%)
- Vodka: Grey Goose (91%)
"Kudos to companies that have sustained their brands, and continue to create meaningful differentiation and engagement," said Passikoff. "Consumers in those categories have, as they've done for nearly 20 years via our emotional and predictive metrics, indicated that their expectations regarding 'brand' have again increased. Brands able to better meet consumer expectations act as surrogates for added-value, engendering more loyalty than those based on the primacy of product and a coupon."
"This year though, many products and services that consumers formerly viewed as 'brands' are now regarded as comparable in all key attributes that drive purchase in their categories, making real brands and engagement increasingly rare, but more profitable," said Passikoff.
"However, of the categories surveyed last year, we found 11 categories, mostly CPG, where the importance of brand or emotional brand value has decreased or disappeared," Passikoff said.
"That's the first time we've seen such consumer reaction. Of course, companies should have expected it would happen eventually. You can't build your market on constant low-lower lowest pricing strategies and promotions, and expect your offering to be seen as different or better than the competition – who's doing precisely the same thing."
Brand Keys emotionally-based engagement and loyalty metrics found that in the 11 categories they had formerly measured (OTC Allergy Meds, Cosmetics, Facial Moisturizer, Hair Color, Shampoo, Conditioner, Laundry Detergent, OTC Pain Relievers, Paper Towels, Pasta Sauce and Tooth Whiteners) the product evaluations by the brands' own customers were found to be statistically identical.
"Names of products were, of course, known," noted Passikoff, "but consumer choice is, for the most part, not driven by awareness. Purely rational aspects still drive these categories –primacy of product (does it do what it says well enough that I don't complain?), location (is it on the shelves where I shop?), is it selling at a good price (where's my coupon?)--but it doesn't drive emotional engagement or brand loyalty."
"Advertising and promotion does drive consumer behavior, but no matter how entertaining the ad, it's extraordinarily less powerful than being able to leverage emotional aspects of the product and service themselves," said Passikoff. "If all you stand for is 'shampoo,' you've become a 'placeholder' product, one whose name people know but don't know for anything in particular and have absolutely no (brand) advantage in the marketplace.
Four categories Brand Keys has measured in past waves have gotten so "compressed" in terms of actual competition that there is no longer a reasonably large enough inventory of national brands to examine (defined as more than three). This year these included Drug Stores, Retail Office Supplies, Price Clubs and Packaged Ice Cream. Brand Keys assessments provide the emotionally based diagnostics to explain this migration to "placeholderism."
"But all this changes the paradigm of what 'brand' and 'brand value' have become in a more-and-more consumer-controlled marketplace," said Passikoff. "Real brand loyalty and emotional engagement is still the Holy Grail of marketing. Loyalty is still a leading-indicator of consumer behavior and profitability. Brand power is one of the first measures of competitive advantage that investors seek, since companies that can leverage their brand always profit from long-lasting customer loyalty that drives sales."
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