Building Customer Relationships in a Pandemic World

Consumer expectations have been shifting rapidly over the past few years, and COVID-19 further accelerated these behaviors. There is an urgency to improve the customer experience, customer retention, and loyalty. Brands will need to adapt to pandemic-driven changes by improving the customer experience across marketing, sales, commerce, and service and its overall role in our society.

Three major trends along with the pandemic have converged to shake the consumer marketing landscape: the rise of digitally native brands, depreciation of the third-party cookie, and the fact that consumer spending power now spans generations. 

First, in our always-on, real-time culture, consumers expect interactions to be frictionless and relevant. Brands not only face competition from within the category but from digitally native brands across all categories that are elevating consumer expectations. Brands such as Peloton, Warby Parker, Bonobos, and Amazon have been built from the ground up to manage the entire customer experience. These brands are setting the bar for excellence.

Secondly, marketers are witnessing the collapse of the third-party cookie as the longstanding currency of the digital marketing and media ecosystem. Due to consumer privacy concerns and applicable laws such as GDPR and CCPA, third-party, cookie-based tracking has been depreciated. This data will no longer be available for targeted marketing. Marketers who don't start building their own private identity graphs now will fall behind. With face-to-face interactions curtailed and brick-and-mortar venues temporarily out of action, COVID has not only forced short-term adaptation but accelerated the need for digital transformation.  

We've reached a tipping point where Gen Z is now the largest segment of the US population. Marketers are starting to understand Gen Z, and the generation continues to surprise us. Gen Z is data-savvy, will pay more for high-quality goods and services, is more open-minded to diversity than any other generation, wants to save more, and most importantly to marketers, consumes products and services differently.

Brands that embrace digital and data transformation will continue to thrive. Those who do not will continue to fall behind. In this new marketing landscape, consumers will award brands with loyalty when a cohesive, emotionally intelligent, technology-enabled experience is provided that anticipates consumer needs across the customer experience journey.  

COVID-19 Re-emergence and Re-orientation

What can we expect from consumers going forward?  As we re-emerge from our current reality, consumer behaviors and needs are changing in three key areas. 

Due to the economic impacts and overall uncertainty caused by the pandemic, consumer spending behaviors have shifted toward focusing on needs, not wants, and these behaviors will remain beyond COVID-19. Discretionary spending will center around health, wellness, and at-home entertainment, and all spending will be through a lens of value and frugality. 

We'll continue to see a heightened awareness and focus on well-being. Hand washing and sanitizing will remain, as will general behaviors toward wellness, such as a preference for at-home workouts, the consumption of healthier foods and vitamins, and broader adoption of mental wellness (enabled by things like telehealth and meditation apps).  

And finally, consumers will be even more focused on local. They'll celebrate and rely on local businesses, their neighbors, communities, and choose to stay closer to home. Staycations, domestic travel, and discovering (or re-discovering) their own parts of the country will be prioritized.  

Consumer Sentiment About Loyalty Programs

The events of 2020 have amplified consumer concerns about well-being, financial health, and social justice issues. The pandemic has increased the focus on the value that loyalty programs can provide. Brands must clearly and consistently communicate that value, starting with how members can earn rewards. 

Social distancing has created feelings of isolation and lack of control.  Gamification and engagement enable consumers to feel more connected and in charge of the experience. Adding gamification and engagement mechanics such as leaderboards fosters a sense of community. Additionally, milestone tracking can provide a feeling of control, purpose, and achievement. 

Brand loyalty must also be earned by helping society through diversity and sustainability. It's imperative that a brand fully understands its customers' identity, preferences, and values, which means collecting data throughout the loyalty experience. 

Future Differentiation & Focus

How can marketers exceed consumer expectations and create enduring relationships that result in brand loyalty? Three important areas of focus will help brands differentiate and best position themselves.

First, fuel identity efforts to understand your customer, including changes in preference. The pandemic has made it necessary for consumers to try new products and services en masse. These shifting audiences and changing priorities have created the need to understand who your customers are all over again. This starts with accurate, individual-level data, including terrestrial, device, digital, and emotional identity signals. From the initial first-party identification of the consumer to the beginning of permission-based marketing to the deepening of a relationship, you'll learn more about them through data collection and engagement. 

Second, in today's environment, mass marketing is no longer effective – brands must use hyper-personalization to meet consumers where they are, through experiences, content, and offerings that are tailored to their individual need-states. 

Lastly, live your corporate values, and create conversations and awareness around shared values. Given the current state of our society, it's more important than ever for brands to consider consumer values and expectations. Companies must let their values be known because consumers want brands to take on a bigger, more impactful role in progress and equality.

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