At the risk of offending an entire group of night-lifers, I think it’s fair for me to say that any guy buying bottle service at a night club and any girl putting on her highest shoes and her shortest dress to go clubbing aren’t doing so to find a long-term relationship. That isn’t to say that what they are doing is in anyway wrong. They want to have fun and are likely successful in so doing. The guys are willing to shell out the cash to provide the alcohol, so they can meet girls who want to drink and dance. Everyone is getting what they want. If either party were looking for their future spouse, they would obviously face a likely disappointment.
Why am I talking about clubbing and what in the world does this have to do with eCommerce? Well, you may be unknowingly fostering that kind of relationship with your customers.
Price loyalty and brand loyalty are not the same.
A company like H&M is perfect for the analogy I’m making here: they are a fashion brand, exhibiting great success selling trendy, low-cost, low-quality clothing. They never come right out and tell their customers that the quality of their clothes borders on disposable, just like the men in the club don’t come right out and say they are not looking for a relationship. It’s understood by the buyer, the same way that it is understood by the women, accepting free drinks. In addition to their extremely low pricing, H&M further emphasizes their affordability by promoting discounts and sales and this model has proven to work very well for them.
Ultimately, though, the short-term fun found at the club begins to feel icky and eventually clubbers want the meaning and fulfillment that can only be had in a relationship. Similarly, H&M’s clothes and discounts only offer short-term gratification and the love for the brand isn’t there for customers. Any brand loyalty is cheapened by the actuality that the product is a throw away that they don’t care much about and they are only loyal to the price. Just as a girl is unlikely to brag about a dubious commitment with a guy she only goes out with on weekends, discount shoppers are unlikely to advocate for the brand or even use their products with any sense of pride.
Whatever, sales and discounts totally work.
Of course they work. I ate at Red Lobster because Groupon had a $5 deal for all you can eat shrimp. I’m never going back, but they did get my business for one night. The sales cycle for a discount shopper is short and discounts/sales are a great way to attract new business, generate revenue and dump inventory. Commerce marketers do not need to stop using them, but, if they are relying on them heavily, they should be judiciously observing margins and repeat business. H&M offers affordable products that there is clearly a large demand for and their business model absolutely works for them. The problem I see is that stores, who don’t have the never ending flow of purchases and customers that H&M has, still emulate their marketing tactics and end up getting crushed on margins and cost of customer acquisition.
The sales cycle of a loyal customer is long.
Sociology is a big part of making brand choices, according to The Association of Consumer Research. They found interrelationships among perception of others, self image, and brand choice, supported under the perspective of Symbolic Interactionalism. For customers to identify with your brand and your products they need to be informed and educated about what it means to be associated with them.
How to start building customer loyalty: Inform and Educate.
A company looking to compete with H&M by touting quality clothing can not simply list expensive products using pictures and details, like the fabric blend, in the description and expect someone to know that their clothes are high-quality or even to know what “high quality” means. They need to highlight and embody that quality in all their messaging and imagery to inform a shopper. Then they need to explain why it matters. They could accomplish this by creating a blog post, educating people on different fabrics and blends and why one is better than the other or why a railroad stitch is better than the stitching used in H&M’s clothes. I, for one, don’t know those things and I think it would be useful information. Once they have content in place, they can promote it using social media and an email nurture campaign. This would not necessarily generate the level of immediate sales a discount would, but it would help consumers get to know the company and it wouldn’t violate the integrity of their email box or their social space with an obvious sales ploy. Overtime, this is what gets people to buy into a brand and coordinate that brand image with their own.
On their way to becoming the counter to H&M, Flint and Tinder was able to tell this exact narrative in a two minute video on the popular crowd sourcing site Kickstarter. The video about their extremely well constructed sweatshirt that they dubbed the “Ten Year Hoodie”, also taught the viewers of a thing called planned obsolescence, the policy in industry design of planning or designing a product with an artificially limited useful life, so it will become obsolete, that is, unfashionable or no longer functional after a certain period of time, and how the wasteful clothes that people are buying were made to fall apart. Not their indestructible hoodie, was the story F&T told and the people responded by pledging $1 million dollars over the $50,000 they originally asked for. They are now telling stories about their other SKU’s like premium underwear and metal shoelace tips.
So, if you don’t want your products to be something customers spill their Redbull Vodka on, wear to bed and throw away and/or you want them to be something customers want to take home to introduce to their family you have to market those products with the respect they deserve.