In permacrisis, stronger relationships between brands and customers mean stronger businesses.
The world is changing faster than ever before, and insight departments are feeling it.
Until not so long ago, business orthodoxy meant competing on more functional advantages (price, product, promotion, distribution). But now, in an era of globalization, disruption and digitalization, the biggest shifts are driven by what people expect of brands.
MeToo, The Cost-of-Living Crisis, The Greta Effect. What started as localized, one-off events have turned into global movements that have profoundly affected the tradeoffs consumers are willing to make. Simply put, expectations are much higher, and for brands to win in this environment, they need to learn to give as much as they seek to get.
Our hypothesis is that we’re on the cusp of a new phase in business. In a relationship economy, customers (and employees) will seek out brands that feel invested in them. For businesses, brand-customer relationships will become the most important source of competitive advantage.
For businesses, brand-customer relationships will become the most important source of competitive advantage
But relationships are difficult. They take time to build and maintain. They demand compromises, lateral thinking, bravery. In this article, we’ll explore the evolving landscape and provide recommendations for how to keep your customers at the center of your business in 2024 and beyond.
The crises that keep coming impact brands, customers and relationships
Think back to January 2020. It’s a normal, end-of-boom cycle, and it looks like the recessionary doomsayers might have gotten it wrong. Come April, we’re facing a once-in-a-lifetime pandemic that shuts down the global economy and disrupts every aspect of our daily lives. By October, the stimulus brings the economy roaring back: home improvement and home fitness takes off, Zoom skyrockets to success, and the valuation of delivery services like Instacart and DoorDash soars. And let’s not forget about vaccine-fueled revenge travel.
In the fall of 2022, inflation rears its menacing head and one year later consumers are barely hanging on. Credit card debt is at an all-time high and, for the first-time ever, new homes are cheaper than existing homes as people are staying put, clinging to their low mortgage rates.
As brands place their bets for 2024, they should be asking whether next year will bring a return to “normal” or more of the same. Here’s why we think the latter:
1. Since the beginning of 2023, we’ve been in what can only be considered a rolling recession.
First technology. Then banks. And we think there are some obvious candidates for who’s next (we’re looking at you, commercial real estate market, retail, utilities, and automotive). While housing isn’t in a recession yet, due to fixed-rate mortgages in the US, people aren’t selling their homes, which has created a frozen equilibrium due to suppressed demand. UK home sales in 2023 are also predicted to be “the lowest in a decade.”
2. The Fed may need to break the job market to finish the job on inflation.
Governments across the globe have borrowed so much money that they cannot allow inflation to continue. So, breaking the job market becomes the better choice for the system even though it’s the worst choice for humans. What the Fed does will impact the global economy.
3. Major conflicts raging in Europe and the Middle East and a divisive US election will continue to shake consumer confidence.
A negative shock to consumer confidence will result in a decline in real GDP. Latest predictions from the former president of the European Central Bank are for the EU to tip into recession soon, triggered partly by the war in Ukraine.
The reality is big, external events have a sneaky way of impacting you and me. And when consumer confidence is lower, so is spending. And, in this context, the relationships between brands and people are turned upside-down.
The era of Relationship Thinking℠
In this age of uncertainty, people are re-evaluating what value means to them and what brands can do for them. This means brands need to adopt a new paradigm when creating new services, products or experiences, and seek to give as much as they seek to get.
1. Knowing who you are for
Brands are increasingly challenged to fight internal biases and bring more diversity in how they operate, so they are better prepared to navigate generational and demographic shifts. For example, the US population will soon be more Hispanic and non-White. Research shows there are also growing concerns about the impact of Gen Z on the workplace—including demands for companies to prioritize purpose and a diverse, inclusive corporate culture. Brands could take McDonald’s as an example for having literally embedded teenagers’ voices within the wider business and having, as a result, created marketing that has been praised for its representation, creativity, effectiveness and innovation.
2. Showing up where it really matters:
It’s not just about knowing your customers; it’s about liking them. The emergence of AI is raising the bar on these digital experiences and expectations, but it’s difficult for brands to find the right balance between technological efficiency and human connections. Especially with higher scrutiny on cost and spend. So, how can your brand strategy think first about what is good for people and how to language emotionally, rather than (just) what is good for their bottom line?
3. Reimagining the value exchange:
With high interest, inflation and the cost-of-living crisis, consumers are re-evaluating what really matters. A new C Space & Hall & Partners global study, Value – Relationships Under Duress, illustrates just how far people are making trade-offs across category, rather than just trading down. Worryingly we’re seeing people having to make radical choices that sometimes jeopardize their long-term chances.
The relationships between a brand and its customers are built always-on, through big and small moments.
Relationship Thinking℠ is the new ways brands should learn to operate, so they put diversity at the heart of how they build stuff and show up with more empathy and humanity. In practice, this means staying close to people and culture all the time.
The new role of insights: embedding relational intelligence, long-term
The relationships between a brand and its customers are built always-on: through the big moments like your Christmas campaign, and the smaller ones, like the smile of the person handing you your latte. So should the way you connect with (all) customers internally.
1. Open the line and never hang up:
Market Research Online Communities (MROCs) enable an always-on conversation and relationship with smaller and truly representative audiences members. They not only act as the perfect mechanism to stay in tune with these value shifts but also act as a trojan horse in your business—making it impossible for stakeholders to not talk to real people and hear real stories.
2. Never stop listening:
Creating space for ongoing and meaningful conversation, based on openness and trust, means that people will raise problems to you, rather than the other way around, as is usually the case. So, it’s not just a space for you to ask questions but also for people to express themselves and point out things you’re not necessarily thinking about. And, if you’re listening closely, this is often where the next breakthrough comes from.
3. Track what matters to them, not just to you:
Collaborating with your customers through insights to align what you do with what they need is your best chance of navigating choppy waters. Remember that purchase and brand journeys are not the same. You have an on-going brand relationship with your customers and prospects influenced by anything and everything. So, keeping a regular pulse on your brand equity and nurturing customer relationships is more important than ever to help fuel your future growth potential by inspiring ideas, action, and a customer-centric culture. A trusted market research and insights partner can help you better understand and connect with customers through current and future disruption.
Do you know how insights are evolving in your industry?
Find out what it will take to keep your customers at the heart of your brand in 2024 and beyond. Schedule a complimentary consultation with one of our brand growth experts.
