Developing brand relationships sounds like a good thing to do. But what does this really mean in practice? Introducing a brand to consumers, and reminding them of that brand is the main task of brand advertising. However, this is not the same as creating and fostering a ‘brand experience’. That comes down to how someone is treated over the phone, face-to-face or online.

As retailer brands become stronger and stronger and as the power balance continues to shift toward retailers at the expense of brand owner, marketers face difficult times especially in FMCG categories. The consumer is undoubtedly the decisive ally in the future success of both retailers and brand owners, however, as manufacturers will never be able to achieve the same scale of power as retailers, the only way they can build presence is by having consumers demanding for their brands to be on the shelf.

In the quest to win an ever-larger share of the consumer wallet, marketers have traditionally looked toward advertising as a solution. Product branding is a well-established method in the promotional toolbox, and particularly important for low involvement categories, such as FMCG markets. However, it is still a blunt approach that lacks any sort of ‘illusion’ for the consumer. Consumers are not stupid. They enjoy differentiation and real value and promotional activity that involves distinctiveness is the best strategy for brand owners to compete with flourishing retailer brands.

With the increasing saturation of advertising, brands have looked toward alternative methods of targeting customers. Direct Marketing is one route that brands use in order to harness, accelerate and prolong consumers’ immense spending power. However, whilst brands have the power to create promotion offshoots for positive effect, it is not always a given that a u-turn in branding is a safe strategy. In 1994, eyebrows were raised in the advertising community when Heinz announced that it was to cut its UK advertising budget and invest heavily in direct mail campaigns aimed at the end users of its products. The company had become only too aware of the power of the major retailers who had developed their own-brand ranges in direct competition with those of Heinz. Sceptics doubted whether it was realistic to sell a low value product by direct mail, would it be cost effective and would it undermine Heinz’s price competitiveness against other own brand products? It became clear when Heinz diminished their direct marketing efforts that the experiment was not the wonderful opportunity for profiling and targeting customer individually as was originally envisaged.

As the Heinz case study proves, there is still a role for above-the-line mass media advertising, particularly for low value products, where there is no distinct single customer. When the annual sales value of a customer is comparatively low, to target them all individually does not make sense. The cost per impact is ridiculously high and is not justified by the return on investment. This is where data-driven marketing can be put in place, as it delivers the same level of segmentation and should be of more value to marketers. It ushers retailers and brands into a new marketing era where best practice organisations are adopting a highly customer-centric approach (as opposed to product-centric) to their entire business model. This enables them to base business decisions not upon assumptions but upon actual information gathered about their customers’ behaviour, motivations and preferences.

Highly customer-centric industry sectors, such as FMCGs, with significant breadth and depth of available customer data have been shown to be the most able to populate new markets successfully. This is because customer data frees creativity. In the absence of preconceived ideas about how and where the brand extension should be directed, it is the behaviour, preferences and feedback of customers themselves which shapes corporate growth.

Marketers need to not only analyse customer spend by product, but across the whole product/service range in order to manage revenue effectively. Customer centricity of this kind enables businesses to think not only about product profitability but also about customer profitability, and to develop brand extensions that are designed to appeal to their best customers. With the most profitable or potentially profitable customers informing the brand extension strategy, the odds of success are markedly increased.

Rob Denton is Managing Director of Navigator Customer Management which was originally established in 1991. Following a management buyout, Navigator Customer Management is now one of the fastest growing independent contact centre organisations within the UK. Rob’s highly developed sense of enterprise has been gained through working within such diverse organisations as the NHS and Fiat Auto and collaborating with a number of agencies above and below the line. He has a proven ability to observe and research key vertical sectors and produce creative customer led marketing ideas and solutions around perceived business needs and requirements. Rob is a member of the DMA Contact Centre Council and is the designated consumer specialist. Navigator Customer Management