If you watched the commercials on the Super Bowl this past Sunday it won't come as a surprise that consumers desperately need greater levels of emotional engagement, if marketers want to – not just entertain – but actually sell products and build real brands. That fact was confirmed by findings from the Brand Keys 17th annual 2013 Customer Loyalty Engagement Index (CLEI).
Yes, consumer empowerment and the internet and social networking and consumers' never-ever-ending experiences with price promotions and discounting have finally reached a saturation level, which triggered a tipping point in the branded world, and now emotional engagement is the dominant driver of brand purchase decisions and brand loyalty.
Yes, we know, marketers (on and off the Super Bowl) have been making stabs at trying to understand emotional engagement for a while now, continuing to make the strategic error of confusing "entertainment" with "engagement." And compounded that by trying to measure it via flavor-of-the moment approaches like neuro-marketing and Twitter counts. Brand Keys assessments for the CLEI are based on an independently validated technique that fuses rational and emotional aspects of the categories to identify the real drivers of emotional engagement.
So congratulations to companies who have sustained their brands, and continue to create meaningful differentiation and emotional engagement. Brands (defined as "products and services that consumers do not see as being freely interchangeable") appearing in the top-10 of this year's survey with some of the highest emotional engagement levels, include:
No, you read that subhead correctly. Perhaps it would be more accurate to characterize these categories as no longer being "brand-based," with products and services that consumers used to view as 'brands' now regarded as comparable in all key attributes that drive purchase in their categories. Also, for the 11 categories, which turn out to be mostly CPG, the importance of brand decreased or disappeared altogether for the 1st time in the 17 years we've been doing this study.
Which is what happened to 11 categories where customer evaluations for products and services turned out to be statistically identical to one another. Names of products were, of course, known, but consumer choice is, for the most part, not driven by awareness. So it turned out that purely rational aspects ended up driving these categories. Things like – 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?) – are "table stakes," and do not drive emotional engagement or brand loyalty.
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. Categories that turned into "placeholders" included OTC Allergy Meds, Mass Merchandise Cosmetics, Facial Moisturizer, Hair Color, Shampoo, Conditioner, Laundry Detergent, OTC Pain Relievers, Paper Towels, Pasta Sauce, and Tooth Whiteners).
Companies probably should have seen this coming, but denial isn't only a river in Egypt. You can't build your marketing on continual low-lower-lowest pricing strategies of persistent discounts and promotions and coupons (traditional, in-store, and/or digital) and expect that your offer will be seen as "different" or "better" than the competition – who's doing precisely the same thing you are.
Happily for both marketers and consumers, real brands live and thrive – in certain categories. 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.
There's a great quote from the lyricist Irving Berlin, who had a way with words. He noted, "The toughest thing about success is that you've got to keep on being a success." Today, it turns out, the toughest thing about being a "brand" is to keep on being a brand.
A complete listing of the 54 categories and nearly 400 brand rankings included in the 2013 CLEI can be found at brandkeys.com.