Twilio (NYSE: TWLO) today announced the results of its 2023 Relationship Economy Report. Accordingly, consumers want the same qualities from brands that they expect from romantic relationships. Honesty (50 percent) and reliability (50 percent) are the most desired characteristics of both brands and relationships. Whether the interaction with the brand is short-term or long-term, consumers generally value trustworthiness and consistency from brands.
Consumers also seek diversity in their brand relationships
On the other hand, brand relationships don’t have to last forever to be valuable or meaningful. In fact, only 16 percent of German respondents named “longevity” as one of the most important characteristics they expect from brands. They are also emotionally attracted to an average of 5.13 brands, indicating a willingness to explore and a propensity for diversity. This inclination marks a departure from the traditional notion of brand loyalty.
Sam Richardson, CX consultant at Twilio, comments: “Brands need to think about how consumers approach relationships. These days, a relationship no longer has to be lifelong or exclusive to be considered meaningful. Even a short-term interaction can be sincere and courteous. It’s about being real and respectful. This behavioral shift is important for brands – it may be harder to retain customers than it was ten years ago, but the rewards are much greater when you get it right.”
Pragmatism over emotional connection
In this new environment, expertise and efficiency take precedence over emotional connections, underscoring that loyalty comes from the company’s actions and is no longer determined by the product or service alone. The study found that 34 percent of German consumers expect expertise when contacting brands, while 19 percent value efficiency – far more than the 16 percent who rely on an emotional connection. This represents a remarkable shift in priorities: just last year, the “E3 formula” of efficiency, expertise and emotion was considered equal building blocks of customer loyalty.
However, it appears that brands have “overcorrected” in their efforts to meet consumer demand for functional efficiency, with only around 9 percent of German consumers saying they feel like they are treated as special by brands.
Sam Richardson continued: “There is a clear shift towards pragmatism among European consumers, which is in many ways due to the economic reality in which we live. But unfortunately, it seems that as brands strive more for efficiency, the emotional connection between brands and consumers falls by the wayside. Companies have adapted their strategies to provide trusted solutions that effectively meet consumers’ needs, but they must also continue to deliver outstanding experiences that drive strong customer loyalty and make people feel special.”
Consumers serve brands
The study found that some brands are struggling to keep up with this dynamic consumer environment. On the other hand, consumers seem to be unanimous when it comes to ending a brand relationship. For German respondents, the biggest annoyance is when a brand is unreliable (51 percent). 23 percent of German respondents leave a brand because their complaint was not taken seriously and around a quarter of German consumers leave a brand if it is impossible to reach customer service.
“There is a fine line between too little and too much communication, which highlights the need to find the right balance in interacting with customers and always being available,” comments Richardson. “Real-time personalization will enable brands to deliver the right type of communication at the right time. By providing tailored messaging, offers and products to each individual consumer, they will be able to build genuine, two-way relationships.”
First-party data as the key to success
The study found that marketers are pinning their hopes on first-party data to build more respectful relationships in this new consumer environment.
More than half (57 percent) of German marketers believe that using this data enables more accurate personalization, and 63 percent believe it also creates better customer experiences that contribute to better customer loyalty. Further advantages cited include more transparent data use as a means of building trust (54 percent) and the ability to put the customer back at the center (30 percent).
The emergence of AI will also make it easier for brands to build these unique interactions with each individual customer and create longer-lasting relationships, making them more likely to be accepted into their customers’ inner circle.
Richardson concludes: “In this new, non-monogamous world, generating recurring revenue and staying top of mind depends on resonating with today’s consumers. The brands that stand out will be the ones that demonstrate honesty, commitment and genuine respect – a journey that starts with first-party data. You will build the strongest relationships, realize huge potential gains in customer retention and build a new kind of loyalty.”
2023-09-27 20:25:41
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