Dr Nihar Amoncar, Director of MBA programs and Senior Lecturer in Strategic Management at the University of Derby, offers small businesses guidance on building a strategy to engage consumers and build lasting loyalty in the digital age.
Large businesses have often been accused of using marketing as a function to determine their success by creating mass scale marketing programs backed by significant financial resources, which are used to create repeated ad nauseum among its target ‘segment’ of consumers.
To an extent, this has led to ‘standardisation’ of marketing strategies with companies replicating others’ success rather than charting their own path. The evolution of social media as a marketing tool, however, promised to tilt the balance in favour of creative small businesses, who could use their unique context to create out of the box marketing content using digital platforms to engage with their audience.
This blog will explain how small businesses can use their inherent context to create authentic and customer centric marketing strategies.
Marketing’s mid-life crisis
Marketing appears to be a subject that is being recycled, repackaged and redelivered to marketing students and practitioners to a point where the value of marketing knowledge as espoused by the academic community has become, at best, questioned and, at worst, fully eroded.
Piercy (2009) states that with the emergence of the 21st century, the ‘Segmentation’ pattern championed by the father of marketing, Dr Philip Kotler, fails to explain why different consumers at different places do not always show loyalty.
With increased competition, retention of existing customers has become important (retaining customers is cheaper than acquiring new customers). This requires companies to go beyond lucrative discounts and imaginatively approach the creation of value and image for their products and services.
So how do resource light, small business owners drive a Marketing strategy that is unique and also promises long term retention of customers in an age wherein customer loyalty is being re-imagined?
To paraphrase Rene Vader,Global Sector Leader-Consumer and Retail for KPMG International, emotional connection with consumers is no longer a ‘nice-to-have’ but, indeed, a ‘need-to-have’.
A survey by KPMG International (2019) on customer loyalty among millennials identified that 96% wanted companies to find new ways of rewarding loyal consumers. In this survey, more than six out of 10 millennials wanted their loyalty rewards to be utilised for charitable causes, rather than to be redeemed for personal use.
Marketing needs to be imagined as a tool that looks beyond bringing the customer to the shop floor and satisfying their material desires. It should appeal to the emotions, consciousness and the desire of consumers to extend the feel-good shopping factor from beyond the usage value of the product. The question is – how?
Tribal Marketing – co-creating and going beyond consumer segments
Cova (2002) defines a Consumer Tribe as “a network of heterogeneous persons – in terms of age, sex and income etc. – who are linked together by a shared passion or emotion”. We have seen examples of tribes around us, there is a football tribe, bike riders tribe, mountain climbers tribe and, yes, the vegan and organic foodie tribe.
A tribe is capable of collective action and its members are not mere consumers, but also advocates of the brand and the common emotion that links the tribe together. To explain, the behaviour of these tribes cannot be predicted, and hence they probably may not be a subject of ‘Segmentation’.
Segmentation is based on the principle of homogeneity, and in an increasingly individualistic world, grouping people based on similarity of demographic or geographic characteristic may be difficult to achieve.
Godbout and Caille (1992) state that in a postmodern world, individuals seek products and services less for their usage value, and more for their linking value in order to satisfy their need for communities. Think of it as owning an old, classic car. Its usage value is questionable, and you cannot rely on it for everyday use, but the way it makes you feel is an irreplaceable feeling. Plus, you can spend your weekends discussing its problems with other fellow enthusiasts who share similar emotions.
So are we seeing postmodern behaviours gain prominence? Perhaps. Cova (1997) explains that a post-modern Tribalist individual may also look less on consumption from the perspective of giving meaning to life and more as an instrument to form links with others in the context of a community (single or multiple), which will instead give meaning to the individual’s life. Tribal members are therefore linked together by their shared passion generated from this ‘linking value’.
An example from the High Street
One example in this case is that of The Body Shop. The message that The Body Shop presented to its consumers was not to just look at the usage value of their products, but join their cause of responsible, sustainable procurement and non-testing of products on animals. It stoked emotions and the company was successful in attracting a ‘tribe’ of heterogeneous consumers who were willing to look beyond the usage value and instead see that The Body Shop bought together individuals like themselves, who shared a common passion towards making skin care products more sustainable and ethical.
These customers were not ‘segmented’ into income groups or age groups. Anyone and everyone with a responsible mindset was attracted to The Body Shop. This metaphysical message (or Linking value) enables an emotional connection between the consumers and the brand, wherein its customers become more than mere consumers, they become brand advocates.
Deacon and Harris (2011) observe that marketing should be ‘in context’ of the tribe of the owner/manager and their company’s end users.
Integration of a particular consumer tribe into the business model of a firm can provide it with an edge with which the company may ‘craft a value proposition’. For example, it was The Body Shop founder’s own passion and activism for ethical and sustainable ways of developing products that gathered the tribe and built the unique identity for The Body Shop (which other larger brands have found difficult to replicate). The difficulty in replication happens because customers are able to see who is being opportunistic and who is being ‘authentic’ (more on authenticity later).
The notion of anchoring places
An alternative way of integrating the consumer tribe into the business is by providing or facilitating ‘anchoring places’: informal gatherings or places where tribal members meet physically or virtually to perform their ‘rituals’ (sharing of experiences), thereby allowing genuine co-creation of market value.
Working with Professor (Jonathan) Deacon from the University of South Wales, I carried out research on how Royal Enfield -a former British motorcycle enterprise from Redditch, now owned by an Indian company – went from being almost bankrupt in 1994 to eclipsing Harley Davidson in terms of global sales (Doval, 2015).
Much like the Body Shop, the company focussed on building consumer tribes who shared the CEO’s passion for adventure, freedom and felt that a motorcycle is a lifestyle tool rather than a tool to get you from point A to point B.
Their strategy was to create ‘anchoring places’ with an aim to gather the fans of this 100-year-old legendary, but obscure, brand.
The first step was to develop the linking value that would consolidate the tribe. In their marketing approach, Royal Enfield leveraged controversial topics such as arranged marriages, live-in relationships and joint family system (which are a taboo in India). The strategy was to spur emotions among the young demographic in India (the median age of Indian population is 27) who often felt the burden of traditions in their quest for image building.
Once the linking value was established, the company regularly organised cross country rides (or rituals) which bought the Royal Enfield tribe together.
The advantage of having such anchoring places is that it is an appropriate platform for the company to ‘listen’ to its most passionate consumers (i.e. the tribe).
Royal Enfield used these events to listen to their customers, analyse their needs and use these insights to drive future marketing campaigns, or develop new rituals and anchoring places.
This bottom-up strategic approach to marketing meant that the Royal Enfield strategy was consistent with the needs of their tribe – which strengthens the bond between the business and the tribe.
Authenticity – focus on the value of image
Commenting on how the transition from modernism to postmodernism affected organisations, Firat (1992) explained that the relation between product and image in the modern era meant that the image represented the product and the value was a property of the product.
But in the post-modern era, the value is attached to the image and the product is a representation of the image, wherein the image itself is the product. In such a scenario, the aspect of authenticity becomes important.
Hence, the challenge for marketeers is no more about the novelty of product alone, but the creation of an authentic image for the product. One aspect of the unique marketing approach followed by Royal Enfield to build their global image was to re-invent their century-old British legacy and heritage to build an ‘authentic’ image.
While most of their competitor motorbikes were being mass-produced in state of the art facilities, Royal Enfield maintained the tradition of each bike being hand-crafted in their only existing manufacturing facility in India.
The idea was to ensure each bike remains unique, and this attracted a very specific group of buyers. Ones who weren’t bothered about the usage value of the product,i.e. the performance figures, reliability or fuel efficiency, but were instead interested in its linking value,how the product made them feel, what it allowed them to do with other like-minded bikers, and how it is a platform for them to create an image for themselves.
Storytelling – a vehicle for building authenticity
Communicating authenticity is not an easy job. In a ‘troll happy’ world, a weak attempt at building authenticity can do more damage than good.
A proven method of establishing authenticity is by utilising the vehicle of ‘Storytelling’.
Stories are powerful; most of the things we remember from our past, in my opinion, are events based on which we can create or remember stories.
Royal Enfield ran a campaign titled ‘Trip’, wherein its consumers were asked to share their stories about their experiences with Royal Enfield bikes. The company then used these genuine rider experiences (gathered from anchoring places), to create adverts that featured real users and their experiences, rather than purpose-specific fashion models.
The consequence of this campaign was that the consumers felt more relatable to the brand and appreciated the authenticity. The campaign allowed potential customers to gain first-hand experience of owning a Royal Enfield from genuine users.
So, small businesses owners need to dig deep within themselves and find their passion for their business. I have worked with several small businesses in academic and consultancy scenarios and found that the moment I ask them to go back to their beginnings,stories of passion and emotion flow.
SME owners need to reconnect with their roots, reinvigorate the passion which made them start doing the business they do and use this point to develop authenticity, identify an image that can create linking value and help your customers (existing and potential) to see that you are one of a kind.
Cova, B. and Cova, V. (2002). Tribal Marketing: the Tribalisation of society and its impact on the conduct of Marketing. European Journal of Marketing. 36 (5/6), p595-620.
Cova, B. (1997). Community and Consumption: Towards the definition of the “linking value” of product or services. European Journal of Marketing. 31 (3/4), p297-316.
Deacon, J. and Harris, J. (2011). Contextual Marketing: a conceptualization of the meaning and operation of a language for marketing in context. Journal of Research in Marketing and Entrepreneurship. 13 (2), p146-160.
Doval, P. (2015). Royal Enfield races past Harley Davidson in Global sales. Available: http://timesofindia.indiatimes.com/business/india-business/Royal-Enfield-races-past-Harley-Davidson-in-global- sales/articleshow/46090462.cms. Last accessed 19 April 2015.
Godbout, J.T. and Caille, Â, A. (1992), L’esprit du don, La DeÂcouverte, Paris.
Firat, A. (1992). Postmodernism and the Marketing Organisation.Journal of Organisational change management. 5 (1), p79-83.
KPMG International. (2019). The truth about customer loyalty: The world’s consumers reveal what keeps them coming back. Available: https://home.kpmg/xx/en/home/insights/2019/11/customer-loyalty-survey.html. Last accessed 14 Sept 2020.