Why is It Going to Get Much More Difficult to Build and Maintain Brand Loyalty?

June 12, 20207min

2020 is going to be remembered as a time where customer loyalty took a major hit, closing borders and lockdowns affected the three foundations of brand loyalty: trust, confidence, and availability.

While some economies open up and the stock market erases its losses from the beginning of the year, brand loyalty might take time to recover.

Consumers’ tastes are changing at a faster pace than ever before. We all remember seeing empty supermarket shelves as it was just a couple months ago where shoppers just picked the item which was available (if they were lucky to find one) and not their favorite brand.

Luckily these days are over but consumers got to experience new brands and in most cases much to their surprise, the quality was just as good or even better than expected.

In order to regain brand loyalty brands must act differently and rebuild their shopper’s loyalty, here’s why:

  • Economy – Brands have to compete harder at current as unemployment is at its highest in the 21st century and customers are less likely to make new nonessential purchases.
  • Features V.S Branding – Brand loyalty is being steadily replaced by functional needs as supply chains don’t always have the brand you wanted, which forced consumers to look for equivalents.
  • Online Sales – More customers turn to eCommerce and D2C (direct to consumer) websites where they have more time and data to compare alternatives.
  • Sustainability – COVID19 had strengthened green initiatives and do good movements

According to Edelman Trust Barometer 2020, a staggering 81 percent of consumers want to be able to trust brands to do the right thing and that this is a deciding factor for them. In addition, the report states that 62 percent of consumers believe brands play a critical role in winning against the pandemic and that the country will not make it without the help of brands. This is why 33 percent have already “punished” brands that didn’t respond well – “I have convinced other people to stop using a brand that I felt was not acting appropriately in response to the pandemic”.

With all of these hard metrics, it’s pretty clear why trust is key these days with brands and why consumers are strict about it. However, most brands nither have the resources to run a 12k participants study across 12 countries nor the experts to analyse the results and come up with actionable recommendations.

Instead of running such surveys why won’t we just listen to the content these shoppers leave across social media, eCommerce websites, and other publicly available sources? Analyzing user-generated content (UGC) is where every brand can get an understanding of what their customers think.

So, Why UGC & why now?

User-Generated Content (UGC) is all around us and is actually expected to be over 90 percent of the world data soon. It includes the likes of online ratings and reviews, social media, blog posts, etc.

UGC is important across the board. It’s important to millennials, as 86 percent of millennials say that UGC is a good indicator of the quality of a brand and 68 percent of social media users between the ages of 18 and 24 take into account information shared on social media. Fast forward to eCommerce, and 87 percent of people say that social media posts help them decide what to buy, while research from the Spiegel Research Center showing that leveraging reviews can increase online conversion by 270 percent and that reviews by verified purchasers (vs anonymous) can bump up purchase likelihood by additional 15 percent.

This is why brands encourage customers to leave reviews and provide feedback. But why now?

With COVID-19 and the huge shift to eCommerce and even D2C (Direct to Consumer – where brands develop their own eCommerce channels), UGC becomes the storefront of brands. When a person is online and shopping for a product, brands must have the right UGC next to that product to ensure the purchase. If beforehand some brands could rely on retail shopping and neglect D2C or eCommerce, now we’re at a completely different world. eCommerce had accelerated with the consumer health concerns and social distancing and it will not go back. Brands that commit to eCommerce (and all really should) must embrace UGC as a way to get found better (Search Engine Optimisation – SEO), convey trust with authentic, verified purchasers’ comments, and encourage a purchase. It’s the only storefront there is.

Conclusion

With consumers looking for confidence in brands they know, and brands moving to eCommerce and D2C there is really only one way to project trust – UGC.

Brands embracing eCommerce and D2C should invest in UGC generation as a way to stay visible and trustworthy in the new world so their online sales are competitive. With UGC comes not just the opportunity of revenue growth but also the opportunity to mine these comments and feedback for insights on the commerce, shopping, product, and service experience. In short, go UGC!


Alon Ghelber

Alon Ghelber

Alon Ghelber is CMO at Revuze, an AI-enabled technology analyzing millions of customer reviews, online opinions, and offline pieces delivering experience-related insights and intelligence for companies to optimise decision-making.




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