Companies have faced a year of considerable disruption. The COVID-19 pandemic changed customer behavior, which, in turn, necessitated dramatic digital shifts in company strategies and investments. If that weren’t enough, the social challenges associated with racial justice and the wild ride of the 2020 presidential election and its political aftermath have left many business leaders with more questions than answers. One question is how they can and should manage their brands to be responsive to this disrupted world.
Results from the 26th Edition of The CMO Survey, “The Transformation of Marketing,” collected in February 2021 point to the importance of this question. Specifically, marketers report that “building brand value that connects with customers” was the key objective during this pandemic — tied with “customer retention” (overtaking “customer awareness” and “customer acquisition”).
What tangible actions can marketers take to build that brand value? We offer 10 strategies marketers can put to work to maintain or grow business in this era of disruption:
1. Interrogate Beliefs About Brand Trust
Most marketers believe customers have a great deal of trust in their brands. On a 10-point scale, where 1=significantly below the industry average and 10=significantly above the industry average, the average is 7.9. These numbers appear to be inflated given that 90% of respondents are above the mid-point on the scale (only 10% are five or below). The “Lake Wobegon Effect” appears to be in effect here. Named for Garrison Keillor’s fictitious town in central Minnesota where “all the women are strong, all the men are good-looking, and all the children are above average,” it points to the human tendency to believe we are all above average.
Marketers should dig in and invest in consumer research to see where they stand relative to their competitors — a strategy that only 27.4% of companies reported using during the pandemic. This can reveal consumer needs and concerns that should be addressed, including issues with products, services and the customer experience. Companies with higher sales from the internet are advised to invest even more, because findings show that marketers believe these companies are trusted less than brick-and-mortar companies. Customer research can also illuminate emerging or unmet needs and what steps your brand can take to solidify its position in the customer’s life or business. As an example, many retailers quickly built out or expanded BOPIS — buy online, pick up in store (or at curbside) — offerings to capture soaring demand for products. In addition, they offered flexible credit terms, such as buy now-pay later, to capture orders. Importantly, brands should ensure that their promises are in sync with their competence to deliver on them (Deloitte Global Marketing Trends 2020).
Related Article: How COVID-19 Changed Marketing
2. Invest in a Strong Customer Experience
Seventy-three percent (73.6%) of companies report investing in building better customer-facing digital interfaces during the last year, a figure that increased from an already-high level of 60.8% reported in June 2020. This push is also reflected in an 11.5% increase in digital marketing spending during the last year, despite an overall decrease in marketing spending of -3.9% over the same period.
Digital appears to be the primary way marketers are improving the customer experience, with 74% of marketers agreeing that customers are placing increased value on digital experiences during the last year. This focus on a strong customer experience is expected to pay dividends with marketers rating it as the most important customer priority — more important than product quality, excellent service, a trusting relationship, innovation and price. Marketers currently spend 14.4% of their marketing budgets on customer experience.
3. Improve Transparency
Transparency has emerged as an important factor, especially among millennials. Consumers want straight talk from companies on topics they care about. When asked to “Rate the extent to which you believe your company is transparent with customers about the following topics,” fewer than 50% of marketers report being transparent across all topics offered. The topics for which marketers were most transparent were data collection (42%) and data usage (39.8%), while employee welfare (28.8%), partnerships to source and bring products/services to market (26.1%), how your company makes money (21.2%), environment impact (17.4%), and support of social and political causes (10.2%) lagged.
We believe there is an opportunity to stand out from competitors by being more transparent with customers. Everlane’s success with what it calls “radical transparency,” which involves being full transparent about sourcing, materials and pricing, is an example of how to use transparency to stand out from the crowd.
Related Article: Customers Are Factoring Employee Treatment Into Buying Decisions
4. Seek a Lift From Influencers
Social media spending increased from 13.3% of marketing budgets one year ago to 23.2% in June — a 74% increase in just three months during the pandemic. This level has returned to 14.9% in the most recent survey but is expected to grow to 24.5% in the next five years. Just as important, 84.2% of marketers reported using social media for brand building during the pandemic.
As brands look to make deeper connections using social tools, influencers can be an important part of the strategy. Marketers reported that 7.5% of their marketing budget is focused on online influencers, mostly on LinkedIn, company blogs, Instagram and Facebook, and they anticipate large gains in the use of influencers in the next three years (up to 12.7%). A challenge can be cultivating and/or identifying influencers who can represent the personality of the brand through digital experiences and who stand out and connect with consumers in a meaningful way.
5. Do Good in Brand-Relevant Ways
Marketers believe that customers were monitoring their attempts to “do good” during the pandemic, with 79.1% saying so. Forty-eight percent of marketers agree that customers placed increased value on company attempts to do “good” during this period. Consistent with this, the highest percentage of marketers in survey history report that they believe it is appropriate for their brands to take a stance on politically charged issues. While still only 27.7%, it is notable that more marketers are joining in instead of sitting on the sidelines.
Considering the types of social issues marketers are most likely to align with, actions to encourage COVID-19 safeguards dominated (82.2% of marketers), followed by racial equality, gender equality, and LGBTQ+ equality. Climate, health, education and immigration lagged. Brands should look to their brand purpose for guidance when deciding how much they want to stand out in these roles. Examples abound. In the restaurant industry, Chef José Andrés has prepared millions of meals to feed those hard-hit by COVID-19 and other catastrophes and fed DC voters as they stood in line to vote. Similarly, Sara Blakely, founder and CEO of SPANX, has given $5 million to help female entrepreneurs grow their businesses.
Related Article: When Corporate Values, Customer Values and Politics Meet, What Happens to the Customer Experience?
6. Don’t Fret About Price
When asked which consumer behaviors they had observed during the pandemic, only 43.3% of marketers noted an unwillingness to pay full price. In fact, marketers believe that willingness to pay full price will return to normal levels over the next 6-12 months. This is consistent with the survey finding that customers are de-emphasizing price, the importance of which has dropped by 43% since 2009 when marketers rated it as customers’ most important priority.
7. Get the Word Out
When asked what marketers were tasking their employees with during the pandemic, 67% report they were encouraging them to “get active online to promote the company and its offerings” and 66% were focused on “developing new advertising and promotional strategies.” This means that competition for consumer attention online has gone up — all in a time when consumers are overwhelmed by high-intensity digital activities for work, distance learning, or their social lives — or some combination of the three. Marketers should ask how they can reach and connect with their customers in novel ways while not contributing to digital fatigue. The approach likely varies depending on the target audience. An important piece is to understand how the customer engages and meet them where they already are.
8. Integrate Customer Data End-to-End
In June, only 25% of marketers shifted resources toward data integration for end-to-end customer tracking during the pandemic. This number has nearly doubled to 43% of marketers investing in these technologies. This is an encouraging sign because it can be critical to integrate the journey data, so that marketers can more fully understand how customers are engaging with their brands and what should be improved. When done transparently and with an eye toward protecting consumer privacy, this can provide significant benefits on both ends.
9. Seek Value-Creating Partnerships
Only 44.5% of marketers report that their companies have shifted resources to building partnerships. We think this is a missed opportunity. Combining products and services in an innovative way that enhances quality of life or meets an unmet need during the pandemic might resonate with consumers and allow the company to grow with lower budget outlays.
10. Identify New Sources of Brand Growth
Only 48% of companies report shifting resources into new products and services during the pandemic. In the June 2020 survey, fewer than 45% of companies prioritized using employees to generate new product and service ideas and less than 16% of companies used social media to identify new product and service opportunities. We see an opportunity for marketers to seize this opportunity for innovation because consumer behaviors have drastically changed over the course of the last 15 months, meaning there will be market gaps and those who fill them innovatively can be early-to-market and grab significant share.
What new offerings work for your brand and which customers should you try to reach? Some sectors have taken the lead with B2C Services companies shifting resources to develop new markets by a whopping 86% and developing new products by 26.5% over the last year. In this case, weak or stalled growth in traditional sections likely fostered an explosion of experimentation in growth opportunities.
Brands have a strategic role to play in helping companies survive and thrive in this pandemic-lingering period. These 10 recommendations can help build brand trust and use brands to drive growth in this period of uncertainty.
Christine Moorman is the T. Austin Finch, Sr. Professor of Business Administration at the Fuqua School of Business, Duke University. Christine is the Editor-in-Chief of the Journal of Marketing and founder of The CMO Survey, which is dedicated to improving the value of marketing in firms and in society.
Brittney Shkil is a second-year MBA student at the Fuqua School of Business at Duke University. Prior to Fuqua, Brittney spent five years at Deloitte Consulting in the Technology Strategy practice, primarily focusing on front-end customer experience for state healthcare clients.
Jennifer Veenstra is a Director with Deloitte Consulting LLP in San Francisco. Jennifer leads Deloitte’s CMO program and has 23 years of consulting experience in market strategy and customer experience.