Relationship Businesses: Building Brand Loyalty

It’s been said all businesses are relationship businesses. I believe it’s true. It’s also been said relationships are controlled by the person less in love. We can pretty much agree consumers are almost always less in love with us than we are with them. Especially when we can’t take our eyes off their checkbooks long enough to converse with them.

This is the Internet’s legacy as it meets enterprise. Companies that kept consumers at arm’s length, encountering them only rarely (generally as data) suddenly found their buyers (and their refusers, for that matter) appearing in front of them, seeking dialogue.

Some companies rose to the challenge and evolved their business (Kinko’s comes to mind) to make sense to consumers. Other shrank from the opportunity and stuck to what they believed important: marketing. That is, talking to consumers with prepackaged messages via one-way media.

Are consumers less in love? You’d better believe it.

This stems from a quote I read last week. Someone referred to the consumer packaged goods (CPG) business as a relationship business. I thought, “Really?” I mean, CPG is marketing, branding, and advertising in its most elemental form. If you want to understand the mechanics of advertising, study what Coke, Procter & Gamble, and Kraft do. Are they now in the relationship business?

Building CPG Relationships: Old Way

Of course CPG companies are in the relationship business. True, manufacturing is critical to their livelihoods. But all those employees in Atlanta and Cincinnati and Northfield, IL, realize what’s really valuable in the long term is a relationship — a reliable source of revenue going forward. A better way to say it: brand loyalty.

Before the Internet, brand-loyalty construction was done in an ad hoc manner. One-way communication came over mass media, distribution networks struggled to maintain (or simply pay for) prominent shelf position, and coupons were strewn along the consumer’s path. Problem was, every purchase was isolated from every other purchase. Relationship strength lay in the product use experience. Works great for the truly loyal, but it’s tougher for those with many choices.

Building CPG Relationships: The New Way

The Internet changes stuff, right? Well, for some. CPG companies that get the whole relationship thing have used the Internet toward one underlying goal (possibly the core CPG Internet strategy): stringing together those isolated purchases. There are two primary methods of doing this: hard and soft.

The hard method is providing incentives so consumers make consecutive purchases. These programs require work on the part of the consumer, generally a bad thing. The Internet makes this strategy very attractive, as the work is mitigated a bit.

There’s nothing new about this strategy. Brands have invited consumers to save box tops for years. The Internet makes the practice easier to execute and, therefore, more attractive to brands. Today, there are platforms that make these programs’ construction easier to design, build, and manage. Take a look at Cariocas, a small firm in San Francisco with an extremely clever promotion-building system.

The soft method came about with the Internet. I spent many years denigrating this method, but — after talking to a colleague — I’m beginning to see it a new light. The soft method is all about increasing your brand’s presence and prominence in the consumer’s life by simply being there more often, offering new value. Yes, friends, I’m talking content.

Traditional thinking says brands shouldn’t get into the content business. They should stick to what they’re good at: making soft drinks, soaps, and snacks. But if the premise is the CPG business is first and foremost a relationship business, creating soap is critically important, but not a good basis for a relationship. That’s the root of the question those who work on CPG interactive projects face: Who the heck will visit a Web site for Brand Z detergent?

Answer by focusing on the relationship. CPG sites must rethink their core strategy. The challenge shouldn’t be to get consumers to the brand. Instead, consumers go through the brand to something valuable. The content, though, must not be some off-the-shelf repackaged list of boring tips about how to get red wine out of silk pajamas (wink-wink, nudge-nudge). Brands that want to use content to build relationships must use that content to present their personalities to consumers and give them something they can truly relate to.

Case in point: Tylenol’s Ouch the Website. Not a lot to say about the product, right? Take it when something hurts. So Tylenol put together a site with a personality. It believes a bit of pain is OK. In fact, it’s oddly enjoyable… provided there’s an easy way to alleviate it. The site wraps itself in a sly humor, reframing the nature of the brand and, hence, the relationship.

I’m not sure I love this site as much as the Jones Soda site, but at least the affection gap is a bit smaller. That’s progress.

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