For so much of direct marketing’s history, brands continually followed the same process: Build a promotional campaign strategy, target the audiences to receive the promotions, wait for responses, and calculate the value of sales through the responders that ultimately purchase. Such funnel development is the stuff marketing was made of, and what direct marketing was founded on. Over time, marketers realized the frequency of campaigns and the subsequent measurement allowed for a continuously full funnel resulting in more and more customers. But that was then, and this is now, and the direct marketing funnel is dead and won’t be revived any time soon! Consumers are no longer stimulated by large, episodic campaigns that stimulate the behaviors resulting in purchases. In fact, they act when it is best for them, most convenient for them, and when they want value. Simply put, the consumer is in the driver seat and they dictate what, where, why, when, and how they will interact with brands.
Consumers want immediacy, and they expect to extract value from the brands they maintain relationships with, wherever, whenever, and however they choose.
Consumers want immediacy, and they expect to extract value from the brands they maintain relationships with, wherever, whenever, and however they choose. If brands don’t meet expectations, and/or don’t provide immediate extraction of value, consumers leave and find alternatives quickly. The dead funnel doesn’t only impact the way customers are acquired, it also impacts relationship development and loyalty, leaving brands struggling to developing effectively loyalty strategies. To be sure, one size does not fit all, and loyalty points don’t work like they used to. From acquisition to advocacy, generating the right experiences for consumers is problematic as price, product, place and promotion are so fluid. Today, brands are faced with herculean tasks of coordination and orchestration as there are more communication channel options providing new access points that continue to strain the communication continuum for marketers. So, assuming the funnel is dead, and loyalty is struggling, what is a marketer to do? Suffice it to say that doing what has always been done will most assuredly lead a business to the land of extinction as consumers want more, expect to pay less, and have competing value presented immediately at time of need.
Fluent, a large, data-driven, performance marketing company recently conducted research in the automobile aftermarket and found, for automobile owners, that convenience, quality and value were the leading factors for consumers seeking auto products and/or services. Fluent’s research captured insights for both Do-It-Yourself (DIY) consumers, and consumers that seek services providers to maintain their vehicles. For those in the DIY category, owners showed little to no loyalty to chains as 43% of those surveyed visited more than one auto parts store over the last four weeks, with the average number of brands visited equaling 2.3. There is no refuting that chains such as Napa, O’Reilly Auto Parts, and AutoZone continue to invest in consumer relationships as each has a loyalty program. Even automobile manufacturers are getting in the game. In 2016, Ford launched FordPass Rewards, a consumer rewards and loyalty program designed to bring consumers to dealerships for services that third parties, such as Pepboys, Car-X and Bridgestone, have traditionally delivered. As in many sectors, the race is on for consumer loyalty in the auto maintenance and repair market, and the challenges are real.
Furthermore, for those consumers who seek auto services rather than DIY, the results of the Fluent research didn’t indicate services firms would have an easier time acquiring customers let alone stimulating loyalty. For those surveyed, the top three reasons for choosing an auto service provider were:
- Quality of services
With channel expansion challenging placement, and traditional promotion and price being less critical, how does the funnel get filled when you consider the ways in which consumers seek immediacy of value extraction?
Do your homework
Unlike most retail industries, Amazon hasn’t completely entered this landscape, but the “BIG 3” US automakers are showing interest. Therefore, the competition is likely to invest heavily in consumer strategies that facilitate sticky engagement as a protective measure. Knowing what consumers seek and why, and how often is critical for the success in this very crowded and competitive landscape. Understanding consumer expectations and how to meet them during service and or product delivery is critical. Marketers need to analyze their customer’s activities, pick where they win, then carefully choose where they’ll lose, as not all customers are created equal and marketers should invest accordingly.
The shifting landscape
As Ford launches its rewards and loyalty program, it presents other opportunities to leverage the consumer relationship. Dealerships are rolling out office-like amenities, including free Wi-Fi, gourmet coffee, and work spaces while they wait for their vehicle to be services, making them attractive alternatives for today’s mobile professional. As Fluent’s research pointed out, 34% of respondents cited Quality of Service as the top reason for their selection of a dealership to service their vehicle. Is the next phase of capitalizing on competitive market share, for dealerships and quick service providers alike, enticing consumers with state-of-the-art, trendy, and/or luxurious new amenities and conveniences?
Keep it simple
Be consistent. Avoid the pitfalls of disparate message delivery across multiple communication channels. Utilize insights gleaned from analysis and research to develop a communication continuum that supports the customer’s needs at the time they need it. Build your marketing efforts around customer behaviors instead of trying to force an action. The funnel is gone for good, and the consumer now votes with their feet; so consistency, precision, and timing are ever more critical.
While funnel building was dependable for many years, shifts in consumer demands, access to products and services, and the adoption of new communication channels requires brands to continuously modify their consumer engagement strategies. So, while the funnel is dead, and traditional loyalty may also be dying, the one thing we know is throughout history consumers evolve. Savvy brands will recognize there are new opportunities on the horizon, and those opportunities are founded in the insight, knowledge, and activation of such insights to foster the customer relationship on the customer’s terms.