Blog COVID-19

Consumer Engagement: The Brand Solution in a Digital Era of Churn

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Photo of Hanna Kahlert
by Hanna Kahlert

The digital marketplace has been the setting for innovation in every way that business is conducted, not least for advertisers, entertainment propositions and consumer adoption – and the current COVID-19-induced lockdowns are exacerbating the trends. Streaming is replacing physical ownership, monthly subscriptions are replacing contracts, and micro data measuring specific points of engagement have replaced sales as the defining factor in determining success amongst consumers.

Yet, with so much specific data available, meaning can often become lost. Brands have an ongoing engagement problem. No matter how much data they use or how targeted they go, competition is fierce, consumer attention is saturated, and all usage comes at the expense of time spent elsewhere. Consumers do not respond as well to ads anymore. The wrong marketing message can send away just as many people as it attracts. Churn is an ongoing challenge for contract-free services, and consumers are de-facto paying to hide from ads behind paywalls in a monetisation model which currently runs on very tight margins. Brand loyalty appears to have rapidly disintegrated in the digital era of plenty: when there is always a (perceived) better option, loyalty goes under-valued.

With the ubiquity of advertising, brand choices are as much a personal statement by the consumer to their peers as a testament to trust and loyalty in a company. Broader brand engagement – allowing consumers to collaborate with, own, and feel at home amidst the community of their fellow brand devotees – has enabled a new type of audience community which can survive market hardships and ensure lower levels of churn. Psychology studies back up the link to identity building, and driving sentimental rewards (i.e. subjective, personal, or emotional in nature) and utilitarian rewards (i.e. practical or operational gain) as the most reliable indicators of consumer satisfaction and loyalty with brands.

Welcome to the age of the creators: independent creatives are now empowered, independence and choice are key factors to consumers, and the strategic imperative to ‘lock subscribers in’ is a precedent quickly being lost amidst the tyranny of choice defining the marketplace today. Brands now need to develop stronger identities around which to build live, alongside vibrant communities that develop their own value to stay relevant.  As a global pandemic begins to affect consumption and social behaviours to as-yet-unknown degrees, and a potential economic crunch throws the stability of the marketplace to the wind,  it is important more than ever that brands learn what lies behind the distinction between those which succeed, and those that will flounder.

This blog features excerpts from MIDiA’s recent report, Consumer Engagement | Building Sustainable Brands in 2020 and Beyond, now available to our clients. For access, please enquire at stephen@midiaresearch.com.

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