What matters for brand loyalty—connecting the dots!
Running Point and its chief investment officer, Michael Ashley Schulman, CFA, were quoted by The Food Institute in an article — by Kelly Beaton, “Shoppers Willing to Switch Brands” — regarding research showing that consumer brand loyalty is fickle in 2023.
Better, faster, cheaper vs. Multiple consumer connections
Consumer and corporate behavior is complex and can be influenced by a wide range of factors and different perspectives. People’s purchase decisions are not linear; there are so many factors in play and fighting for their attention causing them to often say one thing but do another.
Better, faster, cheaper, has been the product manager’s mantra for decades and remains relevant. But to maintain the brand loyalty and demand that is crucial for food and beverage company success today, multiple consumer connections are needed through customer engagement, personalized experiences, meaningful communication of brand values, and relevance.
- Engagement is not just through social media and email marketing, but also through customer service, review sites, point-of-sale promotions, and cross promotions.
- Personalized experiences through loyalty programs, customized packaging, or personalized recommendations can increase a customer preference.
- Relevance can be achieved by introducing new products or flavors, collaborating with influencers or other brands, changing the packaging, or staying up-to-date with current trends.
- Brand values can help create a strong emotional connection with the customer but can only go so far if taste, price point, or availability is challenging.
Where applicable, food and beverage brands can combat that perception that they are using inflation as an excuse to raise prices by implementing promotions such as buy one get one (BOGO) free, buy one and get one half-off, or any other promotion, coupon, or bundling formula that offers value and/or helps distort the underlying price. Shrinkflation, offering smaller quantities for the same price is another common practice to try to combat the perception of greedflation; likewise, price comparisons to other brands or substitutes can be an interesting albeit occasionally controversial was to show value relative to peers.
Being honest about price increases often works!
I feel there is huge consumer respect however for established brands that publicly declare price increases and simultaneously announce that they are doing so to maintain the high quality that their customers expect. Being honest about price increases often works! Use your brand’s website, blog, or social media to convey the story and control the narrative about your price change—it should be a multi-channel, multi-touch approach. Additionally, although counterintuitive, a price increase announcement creates an opportunity to gain customers because the buzz and outreach may allow other people to realize you offer a more compelling value than their current food or beverage choice.
Quoted article excerpts are below:
“Brand values can help create a strong emotional connection with the customer but can only go so far if taste, price point, or availability are challenging,” Michael Ashely Schulman – chief investment officer with Running Point Capital Advisors – told The Food Institute.
“Brands can combat the perception that they’re using inflation as an excuse to raise prices by implementing promotions such as buy-one, get-one free, buy one and get one half-off, or any other promotion or bundling formula that offers value and/or helps distort the underlying price,” said Schulman, who also added that shrinkflation is another (albeit mildly controversial) option for companies.
Ultimately, Schulman said, honesty usually resonates with consumers. That’s why he said to “use your brand’s website, blog, or social media to convey the story and control the narrative.”
Disclosure: The opinions expressed are those of Running Point Capital Advisors, LLC (Running Point) and are subject to change without notice. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Past performance is not indicative of future results. Forward-looking statements cannot be guaranteed. Running Point is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Running Point’s investment advisory services and fees can be found in its Form ADV Part 2, which is available upon request. RP-23-47