Editor’s note: Robert Passikoff is founder and president of Brand Keys, a New York-based research firm.
Political polarization, voter tribalism and fervent social movements such as #grabyourwallet and #MeToo, have changed the face of everything. News reporting, midterm election planning, family dynamics, market planning, research, engagement and loyalty are changing in every commercial sector this year.
The 2018 Brand Keys annual Customer Loyalty Engagement Index identified new consumer values that have combined to create unprecedented value shifts. And those shifts have dramatically affected the path-to-purchase for brands and the research that identifies the routes those paths will take.
This is especially true when it comes to values that define how consumers view categories; compare brands and category options; and how they ultimately buy, buy again and remain loyal. Brands need to conduct quality path-to-purchase research to have the information necessary to attract loyal customers.
As brands become more political, marketing research is turning into a more complex process – as if it wasn’t already difficult enough with researchers dealing with:
- consumers born hot-wired to the Internet;
- emotionally driven consumer decision-making;
- marketers becoming more habituated to social media without seeing validated ROI models in place; and
- brands active in the political process and/or social activism.
That last point is perhaps the most problematic.
Corporate social responsibility
It is all well and good for brands to want to be good citizens. Normally it has taken the form of corporate social responsibility with the hope that a public acknowledgment of responsibility for social and environmental will positively impact business operations. Generally this did not include politics. Political values have – up till recently – played no part in how consumers defined sectors and brands.
Researchers should expect value shifts on a regular basis but 2018 has revealed shifts on a scale that research hasn’t had to deal with in decades. The injection of tribal political and activist social values into today’s marketplace has transformed the brand space – and marketing research – in a way that hasn’t happened at a large scale since the politicized and socially activated anti-war movements of the Vietnam war era.
The current modification and the abrupt appearance of new values have revealed how consumers view categories and brands. That has resulted in brand leadership changes (and accompanying same-store sales and profitability figures) in 60 percent of the 84 B2C and B2B categories our study tracked, and additional level changes in another 22 percent of the categories. In 2018 that included 761 brands, evaluated by 50,527 U.S. consumers, ages 16 to 66, balanced for gender and political affiliation.
The survey found that political polarization and tribalism injected values into categories related to:
- established social structures;
- family values;
- fiscal conservatism;
- moral order; and
- personal responsibility.
From a social activism point-of-view, leverageable values affecting category dynamics included empathy, empowerment, equality, individualism and pride.
The shift in values has affected how consumers engage with brands. From a behavioral perspective, brand engagement is still best defined by how well a brand is viewed by consumers as meeting the expectations they hold for the values that drive purchase behavior in a given category. The top five brand sectors that showed the largest overall shifts in category values and path-to-purchase dynamics included:
- instant messaging;
- retail;
- broadcast and cable news;
- financial services; and
- social networking
The top five sectors reacting most to political tribalism values were:
- broadcast and cable news;
- financial services;
- banks/credit cards;
- automotive; and
- hotels (luxury).
The top five sectors reacting most to values associated with social activism were:
- retail (all sectors);
- restaurants (all sectors);
- social networking;
- smartphones; and
- consumer packaged goods.
The factors that drive value shifts – particularly as it relates to path-to-purchase and consumer behavior in the marketplace – can be more difficult to capture via traditional modes of research inquiry.
The industry in general has commented on this, and The New York Times critic Herbert Muschamp has specifically made note that over the past 50 years worldwide brand engagement has gravitated from the sphere of rationality to the realm of desire – the objective to the subjective. So the traditional research approaches may be mathematically precise but today they miss more than they capture.
Value shifts shape behavior
All categories are sensitive to value shifts but some are going to be more sensitive to one set of these new values than others. On average, market researchers miss more than forty percent of the values that shape paths-to-purchase that govern consumer behavior. Those are usually emotion-based. To assist in using each tool to its highest potential, researchers should consider the following questions:
- We monitor all our social networking inputs. Does this tell us what consumers want? What values are important to them? The path-to-purchase derived from social media research is generally muddied. It is an OK measure of awareness but has woeful utility when it comes to mixing political values and brand values. Yes, it’s social but it is also superficial. Yes, it shows customer affiliation but is not predictive of action. And beyond counting stuff, it is difficult to use to measure actual brand engagement, the final step on the path-to-purchase.
- We use higher-order statistical analyses like conjoint. Will this technique give us accurate measures of values and value shifts? Most statistical analyses – including conjoint – work fine for rational category aspects. But unless you’re talking commodities, today’s marketplace is more emotional than rational. We estimate that today there’s a category average-ratio of 70:30, emotional to rational. You can to argue it’s 65:35, or 60:40 in your particular category but it isn’t 50:50.
- We do lots of path-to-purchase research and talk to a lot of our consumers. Can I just ask them? Direct inquiry works great for identifying consumers’ favorite colors or celebrities but not so well for identifying emotional values that can be used to pave an actual path-to-purchase. On the one hand, consumers don’t necessarily want to tell you how they feel about something, and on the other hand, consumers can’t always articulate what they feel. Be sure to include path-to-purchase research that focuses on implicit testing. Researchers should investigate a methodology that combines archetypal psychology with category insight research. This provides a look at the underlying dynamics of the customer engagement and loyalty. As David Ogilvy, often referred to as the father of advertising, always said, “The consumer does not behave as he says, he does not say what he thinks and he does not think what he feels.”
The changing path-to-purchase
Brands need to take a hard look at themselves and their customers. It’s likely that consumers have an entirely new idea of which direction their paths-to-purchase are heading. And when it comes to the researching the new values, researchers should take a good look at the capabilities of their current methodologies and consider incorporating new ones to accurately map the paths-to-purchase.
The questionnaire conducted by Brand Keys and shared in this article has a test/re-test reliability of 0.93, off National Probability Samples, and is recalibrated every five years. From an applications and statistical perspective, these assessments have been used worldwide to identify B2B and B2C paths-to-purchase, with high correlations (0.80+) with in-market behavior.