Emotional bond with consumers

Companies can't forget the relationship factor in marketing

Relationship marketing isn’t anything new. The term coined in 1983 by Leonard Berry essentially means that businesses should focus more on serving existing customers. Berry’s basic premise was that companies would be foolish if they thought marketing was only about winning new customers, rarely about retaining them. Companies all over the world have been practising relationship marketing with varying degrees of success ever since, but marketing guru Jagdish Sheth says the concept needs a reboot.

Sheth should know, going by his scholarly contributions in consumer behaviour, relationship marketing, competitive strategy, and geopolitical analysis. The professor who is currently on a short visit to India, says many companies have forgotten the "relationship" part in their obsession with just "marketing", and need to transition from their single-minded focus on capturing share of wallet to capturing share of heart as loyalty programmes, bundled offerings and personalised services become universal and undifferentiated. “Share of heart, as the name implies, goes beyond offering economic or functional value to bond with customers on an emotional plane. The relationship needs to move from business to friendship,” Sheth says.

He gives an example of how even famous names in the corporate world have forgotten the basic rules of engaging with customers while digitalising their operations. Sheth names at least three leading airlines that have not even called once to find out why he had stopped using the frequent flyer miles he had accumulated. Just one call from them would have signalled that they cared for him as a valued customer. Since they didn’t bother, Sheth has shifted to other airlines. Relationship marketing is not just more of data analytics; after all, you are dealing with human beings and their emotions, he says.

Relationship marketing stands in contrast to the more traditional transactional marketing approach, which focuses on increasing the number of individual sales. While the importance of the latter can’t be undermined, the problem can be this: A customer may be convinced to select that brand one time, but without a strong relationship marketing strategy, she may not come back to that brand in the future. 

Bonding on an emotional plane with customers requires a company to be honest, and it doesn’t matter if the communication exposes its vulnerable side. Domino’s, for example, did that with great effect through a series of ads called Pizza turnaround, in which it showcased a series of negative customer reviews, read by real Domino's employees, before promising a new and improved recipe. By admitting its mistakes, Domino's re-invented its brand as transparent and honest.

Some companies do it by using the “scarcity” principle. For example, airlines and ticket aggregators use it with great effect by using a tagline that says “only three seats left at this price!”. This scarcity principle goes back to the simple formula of supply and demand: The rarer the opportunity, content, or product, the more valuable it is in the consumer’s mind. Of course, this can’t be overdone as it would lose the novelty value soon. Others appeal to self-esteem, which is at the top of Maslow’s hierarchy of needs pyramid. People want to feel important; like they’re part of an exclusive group. That’s why advertising sometimes says: “We’re not for everyone.”

Of course, the challenge of emotional bonding with customers is becoming more intense every day because of technology, and companies will have to walk that extra mile to make it work. For example, earlier, companies could use their engagement strategy with the requirement of a family. That is simply going away because of what Sheth calls “the rise of the roommate nation”. Earlier, family members used to eat together, do things together. Today that is not the case. People are becoming a lot more individualistic in their family behaviour. This means, within a family, there are individual preferences for brands. 

The potential for marketing in such a roommate nation is enormous. But the challenge now is to bond with each member of a family who have their individual brand preferences. While mobile phones have made the job easier, companies would have to realise the need for focused customisation — not through an abstract use of technology, but by using technology to create that emotional bonding so that customers go back to them again and again.