Marketers who are still focused on market share are missing the reality of today’s consumer power. Consumers are both trying new brands and moving to private label products at a record pace. Brands should be doing two things right now. First, remove costs from the supply chain and second focus on keep existing customers happy.
A lot of brands live, breathy, and die by market share reports. They overlook one thing: consumers don’t give a damn about market leaders.
While revenue tends to increase during increases in market share profit tends to decline. Why? Because it costs more to “buy market share”. Some smaller brands realize this and they are quite content to just carve out a small share and maintain higher profits. As one client told me when I asked why they weren’t at Wal*Mart “it just costs too much money to do business with them”.
According to Forrester, revenue potential increases and then remains relatively flat when improvements are made to poor experiences. However, when improvements are made to already good experiences the revenue potential increases exponentially.
If a customer buys your product and it’s damaged or not maintained right at retail who do you think they are going to blame? Freezer burn on frozen foods is going to lead to customers abandoning your brand not their favorite store(s).
Grocery prices have skyrocketed during the coronavirus pandemic. That has Americans spending more at the supermarket than they have in years. Prices are spiking — and not just because people are buying more groceries as they spend more time at home. The pandemic has had a strong impact on grocery prices this year, according to seasonally adjusted data released Friday by the Bureau of Economic Analysis. The BEA tracks personal consumption expenditures to help measure inflation. From February to June, meat and poultry prices rosenearly 11%, with beef and veal prices seeing the highest rise, spiking 20%. For pork, the increase was about 8.5%. People are paying more for other staples, too: During the same time period, egg prices shot up 10%, and shoppers shelled out 4% more for cereals and fresh vegetables.
And it’s not only food prices. Prices of bike are increasing as well as supply can’t keep up with demand and right now consumers are afraid to dig deeper into wallets.
Higher prices mean that consumers have to make trade-offs to balance their budgets and more and more those trade-offs are happening at retail. Yesterday I was about to buy my favorite pasta brand when, merchandised, right next to it, was a new private label brand that was identical at over 40% off. I made the move with my wife agreeing to try it.
Too many marketers have places too much emphasis on attaining more market share when their emphasis should have been measuring consumers satisfaction with their brand. Can they do both? Sure but it requires more more investment in customer service and a basic shift in marketing priorities.
Today, 89% of companies compete primarily on the basis of customer experience — up from just 36% in 2010. But while 80% of companies believe they deliver “super experiences,” only 8% of customers agree. In other words, companies have a long way to go. And, that means there is tremendous opportunity to disrupt a competitor or gain market share in an industry. Everything a brand does — the way it does its marketing, research, advertising and more — all play a role in shaping the customer’s experience. Focusing on customer experience management (CXM) may be the single most important investment a brand can make in today’s competitive business climate.
Research done by Harvard Business Review shows there’s a direct link between customer experience and annual revenue. They found that customers who had the best experience were shown to spend 140% more than those who had a bad or less than a great experience.
Will consumers go back to their free spending ways? My guess is no. Too much mistrust in government and too much fear that their company could lay them off at any time. If you focus on the customer experience you can ride out the storm.
Originally published at https://www.newmediaandmarketing.com on August 22, 2020.