I just bought a digital camera and here was my path to purchase.

1. On December 30^th, I realized I needed one for New Year’s Eve.
2. While in the car, I checked for deals on my foursquare and shopsavvy apps for electronics retailers near my location.
3. I chose a retailer to call and made sure they had cameras in the price range I was considering
4. I went to the store, chose a camera from an acceptable brand and got a memory card.
5. I then used Red Laser to image the UPC code of each and found lower prices at nearby stores
6. Rather than go to another store, I showed the results to the salesman who got manager approval to match both prices for a total savings of about $35.
7. I left the store feeling smart and successful and more likely to shop there again the next time as I know I will always get the best price there with the same shopping steps.

Marketers are training us to become system beaters. We all see a continuous flood of e-mails offering deep discounts and free shipping. Increasingly, marketers are making it easy for us by going paperless as we download the offers into our smart phones and loyalty cards.  Remember when we had to wait until Dec 26^th for big sales?  Now they start at midnight of Thanksgiving. And social media is a dream come true for system beaters; not only do we find the deals we want for ourselves but now we get to share them with all of our fans, friends, and followers.  We retweet the deals we find, and we like them via Facebook so all our friends see them too.  And by the way, looking for deals is a main motivator to like a brand page in Facebook in the first place.  Also, digital and mobile have compressed the timeline.  I now know I can wait until the last minute to start my research.

So, is this the end of branding? What should marketers and retailers do if shoppers are forever transformed into system beaters?  All is not lost as System beater behavior is itself habitual and selective in how a particular shopper goes about finding deals, just like we only use about 10% of the apps on our smart phones, and watch only 10% of the channels on our TV.  Study how consumers are seeking out deals…their system beating behavior…and then make sure you are ahead of competition at knowing how to use those promotional touchpoints to build habits.

Here are six marketing ideas to get loyalty lift from system beaters in return for hot deals:

1. Like-gate your promotion offers on Facebook
2. Use paid search to drive traffic to your owned media, where the landing page offers a relevant discount in exchange for some lasting marketing benefit;  people sign up for your e-mails, become members, download your app, or at the least, receive a cookie for subsequent promotional ad targeting
3. Make all of your offers shareable by including a sharing widget in the offer.  Reward the fan who shares the most.
4. For retailers, price matching should include matching Amazon online prices (as long as the item is new) so your store doesn’t become a showroom and you convert the trip into a sale.
5. Retailers should attach promotions to check-ins (like $5 off your purchase of $50 or more) to win the trip and build loyalty. (Check out Levelup which David Berkowitz from 360i made me aware of.)
6. Mastery of mobile is a must. Build apps that offer useful information as well as discounts so they turn your brand into a mobile portal. Also, please optimize your website for mobile.

Shopper behavior has forever changed and is forever changing and with it, the rules for branding.

So, if you were creating a media strategy based on relevance rather than reach, how would you redirect your priorities? Here is what you would spend more on than you probably are today.

1. Focus messaging on what makes your brand relevant to people.  Are they planning a healthy dinner for tonight? Looking to power up before work? Looking to be sexually attractive tonight? Create messages that help people achieve their goals, not a hard sell for your product.
2. Owned media.  You would make visiting your brand’s website a habit.  Give them a repeated reason to come there based on relevance to their lives. Kraftrecipes.com is an example.
3. Presence in topic-based forums and communities.  Some of these third party places on the web take advertising, but certainly, your brand can participate in these discussions as long as you don’t trick anyone (like having an employee not disclose who they work for.)
4. Search marketing.  People search for things when they are relevant to them.  You probably could be more creative at thinking about what terms people are using to search for, in order to fulfill a need or desire that your offer addresses.
5. Display advertising based on relevance.  When someone shares an article, or even just reads articles on a given topic, they are declaring that this topic is relevant to them.  Certain companies like ShareThis (disclosure, they are a consulting client of mine) offer the ability to reach an audience to whom your offer is relevant, at scale.  There are behavioral targeting methods based on shopping or abandoned carts that also can trigger relevance-based display advertising
6. Shopper marketing.  Catalina produces coupons and brand messages at checkout based on your shopping patterns.  They can model the relevance of certain types of products to a shopper’s life and deliver coupons at the right time.  Also, you can create thematic shopper marketing ideas that make your product more relevant and stand out to a shopper’s given their goals for that trip.
7. Sharing.  Friends share what they think is relevant to other friends.  Make your brand messages highly sharable to encourage this social media mechanism.
8. Location aware offers.  As mobile becomes a reality, it offers a new way of delivering a highly relevant message.  Especially for retail establishments, relevance is in large part based on geographic proximity.

Now, what do all of these media options that you would dial up have in common?  They are all about ACTION.  People are seeking, shopping, planning their shopping trip, doing research for their purchase, and are out and about doing things.  Relevance marketing is tied to identifying when consumer action is occurring for which you are relevant and directing it towards your brand.

So how do people spend time engaging with your brand?  This is critical to learn and the answer might surprise you.

Clearly, consumers spend time with your brand on Facebook, as you probably have a brand fan page with many fans (those who have liked you).  .  For those I’ve studied, the Facebook fan page usually has many more fans than there are monthly visitors to the brand’s owned media website (e.g. about 15:1 ratio for Starbucks).  Given the size of your fanbase, you probably therefore assume that is number one in terms of time with brand. Now, in addition, there is traditional media.  I have always felt that paying attention to a TV commercial was largely predicated on voluntary brand experience.  Support for this comes from noting that recall scores are much higher for loyal users vs. marginal or non-users of a brand in every test I’ve ever seen.  So let’s add that in as a way that people spend time with your brand.  Finally, of course, let’s consider product usage.  That is certainly a way that people spend time with your brand. (Of course, there are many more touchpoints and social media platforms like Twitter, but let’s keep the example simple that I’m about to go through.)

So, here’s a quiz for all of you.

Consider a brand with 10% household annual penetration and 20 million units sold in a year ($100MM in retail dollar sales).

Assume the media is as follows:

• Facebook fans: 1MM have liked the fan page
• TV annual advertising budget:  $10MM which buys 1 billion 30” impressions
• Owned website: 300,000 monthly unique visitors.

You probably are guessing that “time with brand” goes in this order, Facebook first.  Actually, in my hypothetical case, but based on reasonable patterns, the time spent with the brand is in the reverse order.  Facebook is lowest, and owned media is highest!

Facebook is both an engagement platform (if fans visit your page) and a broadcast platform (fans get updates in their streams).  However, the percent of fans who revisit the fan page monthly can vary wildly, so time with brand might be driven primarily from those updates which you can imagine generate only a few seconds of attention among that subset of fans who happen to be on Facebook around the time of the update. In my hypothetical example, the percent of fans who visit the fan page monthly is low.

TV generates a little under a million minutes of time with brand per month among users in my hypothetical example.  Here is how I get to that. I assume that 100MM of the impressions are delivered to users and that 20MM actually register in some way.  That leads to about 10MM minutes of time for the year.  (Of course, TV also delivers awareness against potential new users, so this is not its only benefit).

Owned media is the sleeper.  The 300,000 monthly unique visitors generate 1.8MM page views and 2MM minutes of time with brand in my example.

Only brand usage, or in terms of advertising, packaging rivals owned media.  If our 20MM purchases generate 100 MM views of packaging at say, 15 seconds per view, that yields 25MM minutes per year or a little over 2MM minutes of time with brand per month among users.

So in our hypothetical, but reasonable example, time with brand is driven much more by your owned media presence and packaging than by Facebook.

This leads me to four conclusions for improved marketing:

1. You are probably surprised that owned media can generate the most time with brand and you are under-playing that substantially.
2. You are probably placing less marketing attention on packaging than you should, especially given that on average 50% of brand choices are made right in the store.
3. You are probably over-emphasizing Facebook vs. your owned media presence
4. You are probably underleveraging Facebook by not finding ways of getting fans to regularly come to your fan page.

For your brand, all of this can be measured according to the structure I have laid out.  Of course, I’m happy to help!

If so, Marketers are missing powerful insights into brand health and growth strategies, especially in a digital marketing age.  

Brand health. Brand equity is your biggest asset. So it follows that brand health is your most important analysis because it is about understanding if that equity is poised to grow or decline over time and what you can do about it. Like the beautiful symmetry of a baseball diamond, there is a certain geometry to a brand.  If that geometry is intact, the brand is healthy.  If the geometry is broken, it looks just as wrong as having different distances between the bases. The geometry includes relationships such as the following. The market leader must have the highest repeat rate, and the greatest number of buyers. The geometry encompasses attitudinal patterns, where attribute ratings for a leading brand are always higher across the board, referred to as the “halo effect”.  Brand geometry relationships can be modeled with a high degree of statistical accuracy. When that geometry is broken, your brand’s market share is going to move back to an equilibrium point.  For example, if a leading brand’s repeat rate is not commensurately higher, or if it does NOT have commensurately higher attribute ratings its share will almost certainly decline over time.

Segmenting your buyers based on loyalty. To direct optimal strategies in digital, the most targetable of all media, we need to first extend these “macro” relationships between loyalty and market share to the micro or individual level because different loyalty groups require different marketing approaches. Let’s segment your buyers by loyalty level into, say, 4 groups based on their probability of purchase towards your brand.  Let’s make the top group those consumers who buy your brand 75% of the time.  The next group buys you 50-75% of the time.  The third group buys you 25-50% of the time and the fourth group buys you a small percent of the time probably because they are loyal to some other brand.  Where does a higher repeat rate for a market leader come from?  It comes from having disproportionately more of its buyers being in the top two loyalty groups vs. a smaller brand.  Again, if this is not the case, a leader will decline.

Brand loyalty and digital brand growth strategies. Now, let’s apply loyalty segmentation to digital behaviors.  With this loyalty segmentation in mind, what do you think the distribution of fans to your brand’s Facebook page is proportionately distributed?  Probably not; it is unlikely that someone who rarely buys your brand will friend or follow you.  How about the middle two groups?  Are they more likely to be visiting the coupon-related shopping sites? What do people search for that leads them to visit your brand microsite?  Are the referring search terms different for loyal vs. marginal buyers?  Probably there is more trademark search for loyal buyers and more discounts, comparison, and issue-related searches for less loyal buyers.  Have you optimized search with this in mind? What does each loyalty segment say about you in social media conversation?  Is it the same pool of comments or are they saying very different things? (I bet they are.)

Some marketers, in the era of engagement thinking might believe that you don’t have to care so much about the less loyal buyers except how to make them “engaged”.  This is actually a mathematical mistake.  If you analyze the sales changes from the four loyalty groups of a growing brand you will see a remarkable thing.  Sales actually must increase from every one of the loyalty groups!  (For the readers who are a bit wonky, as I proudly am, I am happy to describe this one on one if you contact me.) In other words, your brand growth marketing strategies must have a customized component that addresses each group, even the less loyal buyers.

Brand loyalty analysis proves that approaches which are exclusively based on building brand engagement are incomplete. I hope to bring back brand loyalty analysis for a digital marketing age.  It’s throwback, but with a modern marketing twist.

Recently, I was the recipient of what it means when a company gets the loyalty flip.

I was flying back from San Francisco on American Airlines on the 3:15 PM flight, needing to get home before a long day in NYC the next day.  The plane had a hydraulic leak and was taken out of service before boarding. OK, it happens.  To American Airline’s credit, they flew in another piece of equipment that took off for JFK at around 7:30 PM.  It was a really late night, but at least I got home.  Then, a couple of weeks later, I received the following unsolicited e-mail:

November 29, 2010

Dear Mr. Rubinson:

We make every effort to operate each and every one of our flights as scheduled. However, inevitably problems will arise in a business such as ours. Please accept my sincerest apology for the disruption of your plans when you traveled with us recently.

We want to restore your confidence in us. In an effort to do so, I’ve added 5,000 bonus miles to your AAdvantage® account. You can view this activity very soon via www.aa.com/aadvantage.

We hope you will travel with us again soon. It will be a pleasure to welcome you aboard when your plans call for travel by air.

On behalf of all of us here at American Airlines, I’d like to wish you and your family a wonderful holiday season and the very best for the New Year.

Sincerely,

B. J. Russell
Customer Relations
American Airlines

I did not expect this, and it is not about the number of miles.  It is about giving me an unexpected gift at an unexpected time (a line I lifted from the movie “Finding Forrester” but so true) that showed they cared about me.  They showed ME loyalty.  This is marketing based on the principle of doing the right thing and I totally applaud this.

Now, contrast this with what is sadly prevalent practice.  I was flying to the Midwest on a different airline which cancelled the flight after a 3 hour delay (I suspected load factor but who knows for sure?).  There was no information other than to go to a certain gate where a line of over 100 people awaited me to rebook. The only information came in the form of a gate agent shouting to the line, “Who wants to go to Hartford?”  Not even a loud speaker announcement! I mean, whuut??  I had to rebook myself via Expedia for an early flight the next morning and get my own hotel room.

I can’t always fly American, it depends on routes.  However, there is no question that they want my business and deserve my loyalty in return.