3 tips for using transparency to build brand loyalty
Response Media COO Doug Breuer has 25 years of marketing experience. He has worked with a diverse range of world-class clients — including Procter & Gamble, ConAgra Foods, IBM, The Home Depot, AT&T and Johnson & Johnson. Response Media is a CRM agency that combines customer acquisition with intelligent content and email marketing.
Grocery stores used to stock just one version of every product. Now there are lots of brands for every product category, each with multiple varieties, flavors, and sizes — often from the same company. With so many choices, the old criteria of taste, price, and convenience fail to differentiate one brand from the next, leaving customers to make decisions on other factors, like product transparency.
Today, consumers are asking for more information about the food products and brands they purchase. What ingredients does this brand use? Where do they come from? What processes did they go through? What’s the reputation of the company behind the brand? When all else is equal, consumers demand more information to help make their decisions.
The brand loyalty that food and beverage companies used to rely on has waned in recent years. In the past, brands that enjoyed the strongest customer loyalty tended to bring higher prices and profit margins for companies. But during the Great Recession, many cash-squeezed customers (especially Gen Xers) sought out and used less expensive options, such as store-branded products.
Unfortunately, when the recession ended, those brand loyalties did not return. Now, with millennials in particular, brand loyalty is even more difficult to earn. Millennials are a more socially conscious generation, and transparency, safety and social awareness are critical factors in their decision-making process.
When and where matter
The entire customer journey for food and beverage products can be broken down into four simple stages: pre-purchase, purchase, consumption and post-consumption. Research and common sense have made it clear that consumers want transparent information in the first two stages, which is especially critical for first-time buyers. For example, labeling and packaging communicate information about ingredients, nutritional information and other important data directly to customers at the point of purchase.
The SmartLabel Initiative is another exciting option in this area. Participating products have QR codes on the labels that smartphone users can scan to view detailed information. Unilever, for one, is working to update its products with SmartLabel by the end of 2018.
But many food and beverage companies end their transparency efforts there, giving savvy companies a unique opportunity to differentiate themselves from the competition. Our recent consumer study found that consumers often seek informative content throughout other stages of the customer journey, most notably at the consumption stage (43%) and post-consumption stage (32%).
It was also found that these late-stage moments are especially important with millennial moms. Producing and delivering transparency content that consumers interact with — even when they’re not actively researching or making a product purchase — can create a stronger brand connection and give companies a distinct advantage.
A company that successfully differentiates itself from its competition through transparency enjoys the benefits of that relationship, both immediately and over time. In the short term, transparency content helps food and beverage companies increase and maintain their share of the shopping cart. In the long term, these efforts strengthen and deepen a company’s relationships with customers, build trust in the brand and create an environment in which brand loyalty again trumps the appeal of lower-priced competitors.
It doesn’t take a complete overhaul of a company’s strategy or priorities to deliver transparency content to consumers. Food and beverage companies simply need to follow a few tips to achieve greater results when delivering transparency content.
1. Customize transparency content by generation
Profiling and, if possible, segmenting customers by age allows food and beverage companies to meet the transparency preferences unique to each generation. For example, our research found that Generation X places the highest importance on ingredient-related transparency content, while millennials put more emphasis on a food and beverage company’s sustainability, charity involvement and other corporate attributes.
Customizing transparency content and deliverables against these types of generational insights will maximize overall customer engagement and brand affinity. Furthermore, this type of segmentation and content design enables food and beverage companies to not only deliver the “right” transparency content, but to also use the “right” communication channel. That is, the preferred channel for each generation of buyers.
2. Share transparency content throughout the customer journey
Food and beverage companies should take advantage of opportunities to communicate transparency content throughout the entire customer journey. For example, content should be designed and delivered for the specific times of consumption most relevant to each product category. Take a cereal brand, for instance. It should deliver transparency content for access and use during the breakfast time frame, while a frozen pizza brand would target content at the dinner time frame.
This could be achieved via email marketing by simply adjusting the timing or scheduling of automated emails, or by altering the timing of social media posts that contain transparency content. Manufacturers should also pay special attention to the post-consumption stage of the customer journey, where there’s even more opportunity to differentiate brands with consumers.
3. Deliver transparency content with a multichannel approach
Labels and packaging should always act as the foundation for your transparency content strategy. But don’t overlook other opportunities to reach and influence consumers using today’s multitude of communication channels and customer interfaces. Our research found that consumers prefer and use a wide variety of options beyond product labels and websites to access transparency content, including brand emails, brand social sites and shopping apps. It was also surprising to find that consumers highly favored in-store signage as a transparency content source.
Explore and test how transparency content can be integrated into endcap and shelf displays, in addition to your existing email and social marketing tactics. Consider specific, standalone transparency campaigns that share content using an integrated multichannel strategy.
We’re entering a new age of consumer engagement using AI and chatbot technologies, such as Amazon Echo and Google Home, which offer future opportunities to share transparency content. Applying a multichannel approach, combined with generational insights, will truly amplify a food and beverage company’s results.
Don’t underestimate the power of transparency and its potential impact on customers. With the right approach — and in some cases, a little additional effort — food and beverage companies can use transparency to increase their sales and create a new cadre of loyal customers.