Most marketing leaders are struggling to keep up with a rapidly changing consumer, according to new research.
The new study by Adobe and Goldsmiths found that 75% of marketers don’t understand changing consumer behaviour, which is having a major impact on business performance.
However, the brands that are transforming into experience-led businesses which focus on the needs of these new consumers may be outperforming those using only traditional loyalty methods by as much as 14%.
Based on research with marketing leaders and consumers across Europe, the findings reveal how brands are tracking against a number of new consumer loyalty measures, as identified by the academic study.
Loyalty is no longer just based on brand affinity, but on the experience the brand delivers, the study found.
Today’s consumer considers:
- Does the experience adapt to my individual needs? Is it predictive?
- Is the service available when and where I want? Is it prevalent?
- Does the vendor help me to filter choice?
- Does the experience delight me? Is it differentiated?
Garrett Ilg, president of Adobe EMEA, said: “Technology has put vast choice at the consumers’ fingertips, changing the traditional concepts of loyalty forever. The constant disruption brands face today means that they must reimagine their entire customer experience.
“This study illustrates that the brands that do this, are reaping the benefits of a more loyal, and more profitable, customer base. As a result, organisations need to carefully examine their content and data strategies to become true experience businesses.”
The study found that almost two thirds (61%) of consumers report loyalty to brands that tailor their experiences to their preferences and needs.
Data underpins brands’ ability to do this and while 65% say their firm adapts marketing to target individual customer needs, the majority are not yet taking advantage of the scale and precision artificial intelligence (AI) can provide, Adobe and Goldsmiths said.
Less than a third (32%) say they use AI to enhance customer experience, even though nearly seven in 10 (69%) say that it has the capability to redefine customer relationships.
Yet the research shows there is work to be done in educating customers on how their data is being used to create the experiences they demand.
Nearly half (44%) of marketing leaders say they know how customers feel about the way the company uses their data but 76% of consumers want more transparency on how their data is being used.