Author: Jeremy Braune

American Author Jeffrey Gitomer is a loyalty expert. According to Gitomer

you don’t earn loyalty in a day. You earn loyalty day-by-day.

The crusade to convert one-time shoppers into a loyal customer base is one that every brand is necessarily committed to, for survival as well as growth. And it’s not something that happens overnight.

However, with 47% of UK consumers today believing it no longer pays to be loyal, is this a battle any brand can win? And could it really be as simple as setting up a loyalty scheme designed specifically for that purpose?

Loyalty schemes – a brief history

Tesco is the pioneer in this field, establishing the Clubcard and its ‘points for purchases’ model in 1995. This was quickly followed by:

• Boots’ Advantage card (1997)
• Sainsbury’s Nectar card (2002)
• Amazon Prime (2007 – the first of the subscription loyalty models, which was replicated by retailers like ASOS, Selfridges and Next)
• MyWaitrose (2011)
• Morrison’s More (2014)
• M&S Sparks (2015)

Notable exceptions: Asda, Aldi, Lidl and Primark.

Evolutionary times

Loyalty schemes certainly do have the power to influence customer buying choices.

According to a report released by Forrester Research and published in Forbes, 72% of customers online belong to at least one loyalty programme. 78% said loyalty programmes save them money and just under half said loyalty schemes influence what they buy.

There are three key ways in which customer buying choices can be influenced by a loyalty scheme:

1. Offering opportunities to save money. More than half of consumers sign up to a loyalty scheme in order to save themselves money.
2. An attractive set of rewards. 37.5% of consumers are motivated to join loyalty schemes because of the rewards.
3. Improving engagement. Loyalty programmes open up a communication channel between consumers and brands that can be used to optimise engagement. 75% of consumers see loyalty programmes as part of their relationship with brands and 64% of brands identify a loyalty scheme as the best way to connect with consumers.

However, traditional models that rely on cards and vouchers don’t appear to be having quite the impact they used to if the changes taking place in the industry are anything to go by.

Tesco, for example, recently launched a subscription type model – Clubcard Plus costs £7.99 a month and delivers discounts on Tesco products, as well as banking and mobile phone services with a potential value of £400 a year.

Sainsbury’s too is revamping, relaunching as an app, which is also something that Boots has recently done with its Advantage card.

Why do brands invest in loyalty schemes?

• Loyalty scheme customers are more valuable. For example, one survey found that loyalty scheme members spend 5-20% more on average than non-members and buy 5-20% more frequently.
• Giving customers a reason to return. A brand like Apple (the most valuable brand in the world) may not need a loyalty scheme but for more commodified brands it could make a big difference. These are the brands to which consumers feel little natural loyalty. For example, 42% of consumers feel no loyalty to any fashion retailer and one in six consumers switch their main grocery store over the course of a year. Here, a loyalty scheme could influence the choice of one brand over another.
• As a response to increased competition. In saturated markets where competitors are winning ground, a loyalty scheme that has the power to influence consumer preferences is an advantage. For example, according to the experts, Clubcard Plus should benefit Tesco’s larger stores, which have been the most adversely affected by the expansion of Aldi and Lidl.
• Data. Technology fueled developments in data capture provide opportunities for brands to use loyalty schemes to learn more about their customers with more effectiveness than these programmes have ever had the potential for before.

How can a loyalty scheme influence where customers shop in future?

There are three key ways in which a loyalty scheme potentially gives a brand power today.

1. By continuing to offer value. Traditional loyalty scheme models can influence where customers shop by offering a perk that brings customers over from competitors and ensures they continue to return. The key to this is – and will likely always be – value. Customers will be loyal when they feel that they are getting real value in return for loyalty and retailers lose sight of this at their own peril.
2. Through innovation and engagement. Many brands today are beginning to evolve loyalty programmes to integrate other popular marketing tools, such as employing gamification, incentivising user generated content and offering the opportunity to redeem points for experiences, as opposed to just products or discounts.
3. In effectively collecting and using data. Advances in technology have given loyalty scheme data even more relevance, making it faster and simpler to collect and analyse a much wider pool in a way that could never have been achieved in the early days of these programmes.

As a result, today a loyalty scheme can curate a level of customer insight that might previously have taken decades to collect. As Tesco’s chairman said of the new Clubcard Plus:

What scares me about this [loyalty program], is that you know more about my customers in three months than I know in 30 years!

This application of technology to loyalty scheme data has made these programmes a key channel for:

• Generating actionable insights. Retailers now have unique opportunities to understand customers and engage them more intentionally, to identify customer needs and stay on top of these as they change.
• Creating real relationships. A tech-enabled loyalty scheme can collect data that can be used to facilitate personalisation and customised experiences, drive positive communication and enable authentic relationship building.
• Enabling segmentation and targeting. Loyalty scheme data can be fed into omni-channel, offline, and ecommerce segmentation, allowing brands to profile their best customers and personalise offerings to make them more effective.

The end result? In-depth customer connections that give a brand the power to influence how, and when, customers shop, increase brand commitment and drive up sales.

The traditional benefit of loyalty schemes – attracting customers through savings and rewards – still works, especially for those brands that tend towards greater commoditisation.

However, it is the potential for tech-enhanced data capture and what this provides in terms of insight into, and engagement with, a target audience that is potentially so important today.

In terms of brand benefit and influencing where consumers choose to shop, it may be in the tech-enabled collection and use of data where the true power of the loyalty scheme now lies.

What’s your favourite colour? Most of us won’t have been asked that question since our schooldays – unless you’ve recently had a particularly dull experience on a dating app. It’s a query rarely posed in research.

The answer might change on any given day or you might find it impossible to pick one, and yet the ‘Psychology of Colour’ is something that marketers frequently refer to.

According to Dr. Max Lüscher – inventor of the Lüscher colour test – our colour preferences are completely subjective. So, if asked to make a colour choice we all make different, individual decisions that are impossible to predict en masse.

However, Lüscher (and many others) believe that our sensory perception of colour is something universally shared by all. i.e. when we look at the same colour we all perceive it in largely the same way and have a similar response to it.

This can provide a direct conduit to consumer thoughts and feelings in a very simple way.

For example, if you showed five consumers five colours and the question was “choose one” it would be pretty impossible to predict who would pick what. However, if you displayed the same five colours to the same people and asked them “how do these colours make you feel?” it’s likely that you could predict the response all five consumers would have. So, in the context of more effective branding and marketing, it’s in the field of influencing perception where colour has an important role to play.

Does colour really make a difference?

In a word? Yes. There’s a vast swathe of research to back this up – for example Hubspot decided to test the effectiveness of two different colours on a call to action button.

By simply changing the colour of the button from green to red, Hubspot found that its effectiveness was increased by 21%. No other change was made – just the colour – and conversions jumped by almost a quarter.

That’s fairly significant stuff. The Psychology of Colour taps into the way that colour influences human behaviour and decision-making i.e. how the use of colour can cue up certain human responses.

This can potentially be harnessed in marketing terms for the purposes of brand recall, resonance and affinity, as well as driving consumers to take action. So, how does it actually work?

Colour and branding

Over time it’s possible for certain colours to become permanently associated with a specific brand. For example, red with the Coca Cola logo or red and yellow with McDonalds packaging.

The emotional and intellectual response that we have to specific colours then becomes part of the association we have with that brand too. We may also have certain reactions when seeing branding for the first time.

On the whole, all of us (with some exceptions) largely share the same (or a similar) sensory perception of colour. On that basis, colours can communicate in a way that either reinforces or undermines a brand message. For example:

Black

Black frequently speaks of luxury and power. In a brand context very few people would look at the use of black and consider it cheap or associate it with darkness, emptiness or sadness, which might be the connotations of choosing it in the colour test.

It’s a colour that can provide context to brighter colours and which is often used with white, especially by high street brands.

E.g. Nike, Chanel, Hugo Boss, Johnnie Walker Black

Brown

For obvious reasons this is a colour that we often associate with nature but also with earthiness, hard work and humble origins.

It’s viewed as a straightforward colour, rarely triggering suspicion and can also be associated with taste, as it’s the colour of chocolate and coffee.

E.g. UPS, Nespresso, M&Ms.

Red

Red is an incredibly emotive colour for humans. It tends to stimulate appetite, which is why it’s so frequently used in the fast food sector, and its association with urgency can make it useful in a sales context.

Red is synonymous with energy, excitement, power and passion but can sometimes also be associated with anger, danger or aggression.

E.g. Coca Cola, Netflix, Levi’s, Kellog’s, KFC.

Yellow

Stimulation is the primary purpose of shades of yellow, both in terms of mental processes and also the human nervous system.
It’s also strongly associated with creativity and happiness, as well as extroversion and warmth.

E.g. Shell, Yellow Pages, DHL, McDonalds, Ikea, Post-it

Green

The natural link to the environment and the outdoors makes green feel like a relaxing and calming colour.

We associate it with everything, from money to health, freshness, growth and prosperity. It has few negative associations other than envy.

Green is also the shade that humans have one of the most intuitive relationships with and we can distinguish between more shades of green than any other colour.

E.g. Starbucks, Android, BP, Land Rover.

Blue

This is a shade that doesn’t occur in nature and so it has been found to act as an appetite suppressant.

It is also considered the colour of logic and wisdom, reasoning, calm and security – trust, loyalty and dependability are all associated with blue. That might be why blue is used in over 75% of credit card brand logos and is by far the most popular choice for Fortune 500 companies.

E.g. Facebook, Ford, Visa, Nokia, PayPal, American Express.

Purple

There is a fine line to tread with the use of purple – while it’s considered superior, prestigious and sophisticated it can also signal decadence, excess and suppression.

It’s also a highly imaginative and spiritual colour that tends to have significantly more appeal to women than men.

E.g. Zoopla, Yahoo!, E4, Cadbury.

In addition to individual colours, this approach can be broken down in many other different ways.

For example, some groups of colours or shades of colours are considered ‘warm and bright’ (yellow, pink orange and red) whereas others are ‘cool and bright’ (silver, turquoise, lavender).

Violet, navy and dark green could be considered cold dark colours whereas brown, purple and gold are warm darks.

Colours in these groups can be used together to trigger specific responses, such as trust, engagement or stimulation.

Where can the use of colour be effective?

For most organisations, colour will have specific relevance in four key areas:

1. Logos/liveries

Research tells us that colour helps improve brand recognition by up to 80%, which can considerably strengthen the impact of a logo.

If the ultimate goal for a logo is instant engagement, colour not only helps to achieve this but can also trigger a flood of associations before the consumer has even seen it up close.

With the right colours an instant visual connection is established, not just to the brand itself but to its values, personality and mission.

When choosing colours for liveries and logos the key question will be what associations do you want people to make most about your brand and which colour choices will support this?

2. Packaging

Almost 85% of consumers cite colour as the primary reason they buy a particular product. Colour choices can switch consumers off, create notice-ability on the shelf, or entice a pick up to find out more.

In a physical environment, such as a store, colour choices could be the difference between consumers picking one product over an almost identical other.

Designing packaging for audience targeting also necessarily involves consideration of colour. Perhaps predictably, 57% of men like blue the most and green and black are also considered masculine shades.

Women also like blue but are more attracted to red and purple than black. For packaging targeting teens and under 30s, purple is often a first choice.

3. Marketing content (e.g. blogs, articles, whitepapers brochures, direct mail, social media posts)

According to the Institute for Colour Research, people make a judgment about your content in 90 seconds or less.

Up to 90% of the judgment made in that very small window is influenced by the colours they see. As a result, there are three key ways in which colour can be particularly useful in marketing content:

1. Colour can have specific relevance when highlighting a call to action. If the colour choice is wrong that message might be easily ignored.
2. The use of colour can direct the human eye towards what we want it to focus on. So, it can be used as a tool for ensuring that consumers see a priority message first.
3. It can also be employed to ensure that content is legible or images are discernable. Colour can improve comprehension by 73% and reading by 40%.

4. Advertising (e.g. OOH advertising, magazine advertising, digital advertising)

Consumers today are saturated by advertising on a daily basis.

Strategic, careful use of colour can make messaging stand out. As mentioned, it’s also a key part of brand recognition – full-colour ads in magazines are recognised 26% more often than those in black and white.

Crucially, colour gives brands a way to exploit the tiny window of consumer attention in which an advert must take effect – colours communicate instantly, not just in terms of what is being sold and how we want consumers to feel about that but also who is doing the selling.

A note of caution

Although there are clear parallels in the way that many of us view colours and the responses that certain shades can trigger this is not entirely universal.

Factors such as gender, culture, age and experience can all change the accepted wisdom on how orange or red might make a consumer feel.

We all tend to have slightly different associations as a result of our life experiences with colourful objects and that means that we all understand the concept of ‘purple’ or ‘red’ slightly differently.

As a result, there is no magic colour that will ensure your CTA is always successful or that will get consumers to trust your brand. Context is everything – the context of your business and the context in which the colour will appear.

That’s why audience research and the process of testing colours on your target consumers will be essential.

The Psychology of Colour has the power to transform the impact of images and messaging in a branding and marketing context. It’s a tool that, when correctly used, can trigger brand recognition, stimulate engagement with ads or a logo, and embed key associations in the minds of the consumers you want to connect with.

It’s an investment that, once made, can continue to deliver over the long-term, ensuring that branding and marketing assets are being fully optimised and brand resonance is strong.

References

• https://www.fastcompany.com/3028378/what-your-logos-color-says-about-your-company-infographic
• https://blog.hubspot.com/marketing/psychology-of-color
• https://coschedule.com/blog/color-psychology-marketing/
• https://packhelp.co.uk/psychology-of-color-how-to-use-it-in-your-packaging-design/
• https://www.canva.com/learn/color-psychology-the-logo-color-tricks-used-by-top-companies/
• https://explorerresearch.com/importance-of-package-color/

London Fashion Week SS20 (12th – 17th September) was a thoroughly on-topic affair this season.

However, it wasn’t hemlines or textiles, slogan tees or embellishments that were trending but something altogether more urgent. Ironically, the bi-annual fashion carnival closed on an unseasonably warm day, which almost served to underline this alignment with what (other than Brexit) might be the issue of 2019: climate change.

Environmental concerns are dominating the headlines but the fashion industry has always been notoriously deaf on that front. However, this season it appeared that a saturation point had been reached in terms of awareness of the environmental consequences of unsustainable business practices.

Customers have made the connection between fast fashion/consumerism and a lack of sustainability – there is no going back now. And there is a distinct sense of unease surrounding the industry as a result. But do environmental issues really threaten to damage behemoth fashion brands so much that they might actually be forced to change?

The UK fashion industry today at a glance

• In the UK we buy more clothes per person than any other European country, 26.7kg of fashion items per year, compared with 16.7kg in Germany and 12.6kg in Sweden.
• Less than 1% of material used to produce clothing in the UK is recycled into new clothing.
• The fashion industry is worth more than £32bn to the UK economy.
• Brexit is creating a lot of uncertainty. 90% of UK fashion designers voted Remain and the industry is made up of a workforce that includes at least 10,000 European staff. According to the British Fashion Council Brexit could cost the industry £900 million in tariffs.

Why now?

Earlier this year Extinction Rebellion called on the British Fashion Council to cancel fashion week. Although this may sound preposterous to anyone with even a tenuous link to the industry it’s actually not that much of a leap.

The Swedish Fashion Council, for example, cancelled Stockholm fashion week this year – why? Because they are looking to find more sustainable ways of promoting their industry and don’t consider a fashion week to be an environmentally friendly choice.

Although London Fashion Week went ahead as planned it was rife with protests – so dedicated were they that it was impossible for fashionistas to simply sweep past in this season’s Burberry and ignore them. Of course Extinction Rebellion was there – and this time people were listening, creating a general sense that the designer shades had fallen from everyone’s eyes, consumers and labels alike.

There is just too much awareness now of carbon footprints, energy consumption consequences, wasteful practices and pollution for all but the most willfully ignorant to continue things as they were before. This sea change was reflected on catwalks and in events surrounding the three fashion weeks of Europe (London, Paris and Milan).

• For the first time we heard the phrase ‘deadstock’ – unsold clothes from past seasons – being bandied around backstage by some of the biggest designers.
• It wasn’t just all about the new for this season – London based Slingshot PR, for example, promoted Portobello Green, which was a curated edit of vintage clothes.
• Designer Roland Mouret revealed he is on a mission against the wastefulness of single-use clothes hangers – he refers to them as “the plastic straws of the fashion industry.” His collection also featured upcycled baseball caps by the Berlin milliners ReHats.
• Suddenly it was all about designer rentals, retro looks from the attic and anything preloved.
• In Milan this season Gucci staged an entirely carbon neutral show and the label promised to become an entirely carbon-neutral company. Its CEO, Marco Bizzarri, said the brand had considered rethinking fashion shows altogether, but felt technology was not yet sufficiently advanced to replace the practice.

The seeds for this may have been sown far earlier – for example, designer Vivienne Westwood staged a climate change rebellion last season and you can see members of Extinction Rebellion in the new Stella McCartney campaign.

Plus, this year the BFC announced the launch of the Institute of Positive Fashion, a sustainability initiative designed to establish industry standards that ‘encourage’ greener business models. But is this switch to sustainability a signpost of genuine change that the entire industry needs to follow or just a passing trend?

Power to the people..

In fashion, it is generally the designers and the labels that set the trends and smaller brands and consumers who slavishly follow. However, the current focus on sustainability and climate change awareness is travelling from the customers at the bottom of the food chain right up through the industry.

• Research by sustainable clothing brand, Thought, found that a quarter of UK shoppers are intentionally reducing the amount of fast fashion they buy and around a third now proactively avoid garments they might only wear once
• A report by Fashion Retail Academy earlier this year found that consumers are now 13% more likely to choose more expensive, longer-lasting clothes over cheaper items with a shorter lifespan
• This is part of a wider move towards a more sustainable lifestyle – for example 56% are using less plastic and 38% walk or cycle instead of using a car.
• Brands that focus on renting designer pieces or peer-to-peer fashion rental – such as MyWardrobe.com and Hurr Collective are thriving while many high street fashion brands announced losses in recent years.

In May last year a drop of 2.4% on a like-for-like basis year on year in the three months to 28 April was revealed for non-food retail sales in the UK across stores and online. This was the biggest decrease since March 2009.

There were many contributing factors here – and the statistic doesn’t just cover fashion – but the fall in sales was a shock. It may also have served to provide the motivation that some fashion brands required to start looking more closely at what consumers really want.

And, for many, that has meant taking a more environmentally friendly approach. For example, all the evidence suggests that fast-fashion brands like H&M are losing millennial customers and this has triggered a significant refocus at the retailer. Its most recent advert for the 2019 H&M Conscious Collection is out now and promotes ‘Fashion Made From Recycled PET Bottles.’ It’s rather a departure from the tools that the retailer has used to sell fashion in the past and instead focuses on reusing and recycling. It even features the words ‘wear it. And wear it again.’

Customers want brands to help them do more

Customers are increasingly mindful of sustainability and the supply chain of clothes manufacturing, and even the largest ships on the fashion sea are beginning to turn in the same direction in order to remain competitive. Why? Because there is now a very real danger of losing customers and market share if they don’t.

It’s not just about sustainability as a box ticking exercise anymore but a real and genuine way to make a difference. And this really matters to consumers. In fact 88% of consumers want brands to help them be more environmentally friendly and ethical in their daily life.

It’s no longer simply enough for a brand to talk about its values and commitment to social responsibility – consumers want to align themselves with brands that will proactively help them to live out their own values.

The numbers make sense too

Of course big names in fashion are unlikely to go in this direction purely out of the goodness of their own heart. Style sustainability is now also beginning to make financial sense too. For example, in the latest Nielsen report “How and Why Sustainability is Gaining Momentum with Customers” Nielsen found that products with sustainability claims generally outperformed the growth rate of total products in their respective categories. In short: consumers prefer sustainable brands.

But where does this leave the UK fashion industry, currently wallowing in its latest London Fashion Week hangover? One of the statistics so often bandied around is that fashion is the second most polluting industry after oil.

So, if sustainability considerations have forced their way to the top of the agenda then there must be a genuine sense that these issues are real and worth acting on. But can the sector really change?

Whether it’s because of the uncertainty being created by Brexit or the recent years of declining sales, suddenly the industry is listening to how much consumers want to align themselves with brands that enable them to live more sustainable lives.

Whether that means we’re about to see the kind of change that will leave cheaper, less sustainable, high volume brands as fashion roadkill, who knows. But those who plan to ignore the issue should be wary. In the words of activist Greta Thunberg:

change is coming whether they like it or not

( Images shot by Stefan Jakubowski for The Glass Pineapple )

Education is when you read the fine print. Experience is what you get if you don’t.

This quote from American folk singer and social activist Pete Seeger is broadly accepted wisdom when it comes to the importance of reading the subject matter thoroughly before signing on the dotted line.

And yet, so many of us don’t do it. In fact, according to our own research, 57% of UK consumers are ‘avoiders’ and actively unwilling to engage with the detail of the financial product they are taking out, whether a mortgage, home insurance or an investment.

Is that because we believe that “nothing in the fine print is ever good news” (Andy Rooney)? Or is there something else going on here in terms of the way we assimilate information.

And how much of the blame can be laid at the door of the documents themselves?

The issue

It’s impossible to navigate life these days without financial commitment – most of us will at some point be faced with online or printed material that ‘explains’ the product we are buying.

We know we should read it – there could be grave consequences if we don’t – and yet all too often we just file this kind of document in the nearest drawer “for later.”

A pertinent example of this data myopia is NameDrop – a fake social network set up as an experiment to see how much consumers really read T&Cs.

Students taking part in the research were asked to activate the “By Clicking Join,” button, agreeing to abide by NameDrop’s terms of service in doing so.

Paragraph 2.3.1 of the terms of service required them to hand over their future first-born child. 534 students took part in the experiment. Only a quarter actually “read” the T&Cs but all 534 still agreed to join, theoretically giving NameDrop ownership over their entire next generation.

A nation of avoiders

With regard to the 57% of UK consumers who are ‘avoiders’, the majority of us are reluctant to become involved in the process of making financial decisions and so focus purely on the core features and benefits of a product – and then only at the highest level.

Of course, these don’t reflect the entirety of the product, but rather act as ‘good news’ soundbites, enabling us to see and hear only what we wish to. As a result, we happily sign on the dotted line.

Problems can then arise when it’s time to make a claim or when there is a problem with the product. It’s at this point that we find out to our dismay that we don’t have the cover that we thought we did.

Of course, it’s often our own fault. So why do we do it?

Barriers to assimilation

According to consumers, the reasons are myriad and include:

• “What’s the point?” 74% of us don’t expect to understand a financial product so don’t bother trying
• “I’m pushed for time.” 43% of us only allow 20 minutes for the assimilation of information in a key document where £1,000’s or even £100’s of thousands may be at stake, whilst another 22% allow half that
• “I focused on the important sections.” 85% read financial communication in a highly selective manner. Hierarchy of information absorption starts with costs and key features. Risks and how the product actually works are much further down the list.

The fault isn’t just with the financial customer

Although consumer attitudes are certainly problematic, what about the influence of the way information is presented?

The Financial Conduct Authority’s (FCA) Treating Customers Fairly (TCF) initiative was set up to look into this. The initiative was designed to establish whether financial providers were treating customers fairly in terms of the way that products were being presented and sold.

This included looking at the architecture of the documentation that consumers were expected to assimilate when buying financial products. The idea being that making customer communications clearer and more understandable would make them fairer for consumers as a result.

Although the FCA never defined the concept of fairness we did our own research on this and found that, in the minds of consumers, fairness was tightly correlated with the notion of trust.

Simplicity, honest, transparency and putting the customer first formed the basis of what consumers identified as “fair” treatment.

Communications (by whatever channel) that are always clear, timely and succinct was one of 20 recurring fairness themes. However, when this standard was applied to many financial documents it often fell down – and still does today.

Some of the top reasons for this, identified by consumers, include:

• Complex language. The use of jargon and technical phrases is problematic
• Densely grouped text. 3% find this user-friendly but 97% of consumers see it as intimidating
• Documents are too long. Research by Which? found that the small print used by some insurance companies runs to 38,000 words – that’s longer than the whole of Shakespeare’s Hamlet. As 43% are only willing to commit a maximum of 20 minutes to reading financial product documents, many are read selectively or just don’t get read at all
• Vague or misleading language. “Might” or “could,” for example are identified by consumers as “weasel” words that are deliberately evasive. Many are also put off by vagueness, particularly when it comes to charges or commissions
• Risks are difficult to digest. All too often this section of T&Cs is one of the longest and the risks are frequently presented without any relatable context.

Poorly written and laid out product communications remain a big issue for consumers and businesses too.

At Brandspeak we have developed a communications market research tool to identify the extent of this disconnect, right down to the level of:

• Individual words and phrases that confuse or create suspicion
• Sentences or paragraphs that are felt to be too long and therefore prevent easy understanding
• Page layouts that make the content tiring to read or assimilate
• Issues relating to indexes, headings and other navigation devices that don’t help consumers identify the content that they are looking for
• Images and graphs that create more questions than answers!

The product was developed as a result of our early involvement with the TCF initiative. Today, we still use it for those purposes, but also to review:

• Online, TV and print ads
• Email and printed marketing communications

A wider issue

Of course, the barriers created by poor content and presentation aren’t just a problem in the financial services sector.

The same issues exist in every industry, whether B2C or B2B. For example, consider the following:

• Holidays, hotels and flights – most of us are looking for the best deal on cost, not on T&Cs, and so we just don’t read them.
• Price comparison websites – we’re happy to blindly buy energy or insurance online and hope that nothing goes wrong.
• Signing up to “free” wifi – because we don’t read the T&Cs we often have no idea how much data we’re unwittingly handing over by making the connection.
• Buying train tickets online. The purchase process includes accepting 36 pages of T&Cs, which most of us tick without any knowledge of details. For example, did you know that the T&Cs only entitle you to a seat if you’re a first-class passenger?
• Click-to-agree contracts. Digital contracts that we click to sign online present a whole new set of issues. For example, we might be giving web-based services the right to sell our data or signing away essential rights, such as the option to go to court if it all goes wrong.
• Trialing an online service. How often have you signed up for a “free trial period,” not read the T&Cs and then found yourself a regular subscriber?
• Online shopping checkout. 91% of us don’t read the T&Cs during the checkout process when shopping online, hoping instead that if anything goes wrong we’ll be treated fairly.
• Updating apps and software. The updates themselves take long enough so why waste time ploughing through the T&Cs too. For example, only 16% of people read the T&Cs when updating an online banking app, despite the access it provides to personal financial data.
• Tenancy agreements. As these are often presented as non-negotiable documents, and there may be stiff competition for a property, few people go through the document line by line before signing.
• Employment contracts. Do you know about the clause in your contract that entitles your employer to dismiss you if you don’t wear a long sleeved shirt? Of course, your contract probably doesn’t contain that but are you sure… few people familiarise themselves with all the details before taking the job.

What’s the solution?

There are some high tech solutions on the table that could prove useful in future.

Aviva, for example, identifies AI as a possible option, using machine learning to generate answers to common questions to make T&Cs easier to assimilate.

However, the most obvious solution is a fundamental overhaul of the way that brands communicate with consumers, not just when it comes to contracts and T&Cs but in relation to any marketing communication that imparts information that is important to the consumer’s decision making process.

We believe that there is a way to establish trust and improve information assimilation – and that clear, concise communication is the way to do it.

How do the consumers that you’re looking to target with your marketing make decisions when it comes to buying?

This is a key piece of insight for any brand and the foundation of successful interaction with those who could become your customers.

However, it’s not always a straightforward question to answer. While there are plenty of theories about the way that we decide what to buy and the thinking processes that are involved, the popularity of digital purchasing, and the alternative context this has created, requires a perspective shift.

The science bit

For perhaps half a century, the market research sector focused on conscious, rational thought as the method most people use make decisions.

However, as the science has developed, we now know that it’s actually the opposite – the majority of decision-making is subconscious. For any human making a choice, whether that’s which product to pick up off the shelf or which mobile phone plan to buy, one of two thought processes is activated – System 1 (Fast Thinking) and System 2 (Slow Thinking).

• System 1 = intuitive, subconscious impressions, associations and impulses
• System 2 = logical, conscious, methodical, used to evaluate complex matters

System 2 thinking is often more likely to be correct but, according to neuroscience research, it’s System 1 that accounts for up to 95% of our daily, cognitive activity. Including the decisions we make about what to buy.

Does your brand resonate at System 1?

This is the first key question when it comes to understanding consumer purchase decision-making. It’s tapping into this consumer thought process that can make your brand an intuitive choice and trigger unconscious recall of your products and reputation.

The purchase of lower value products is more likely to engage System 1 thinking – dealing with a higher value, more complex item is often when the human brain will call on the more methodical and in-depth analysis of System 2.

However, there are exceptions – Apple, for example, has been incredibly successful in creating emotional brand resonance with high value products.

Brandspeak uses 3 key measures to determine System 1 resonance:

1. Spontaneous awareness: we measure unprompted brand awareness versus competitors – and the speed with which the brand in question is brought to mind
2. Emotions aroused: we measure the brand and its competitors against a basket of different, positive, neutral and negative emotions, to determine the strength and differentiation of its emotional profile
3. Visual recognition and association: we assess the extent to which the brand can be recognised in various physical guises including the logo, the strap, the packaging and advertising – as well as the thoughts and associations corresponding to each one.

The online shift

The use of System 1 and System 2 thinking gets thrown somewhat off centre when it comes to the purchasing decisions that are involved in online buying.

Rather than standing in a store faced with two products to choose from, consumers are in front of a screen, under no pressure and with a wealth of different resources that could affect how choices are made.

A prime example of this is the way influencer marketing can sway the decision-making process. 54% of social browsers use social media to research products, and influencers have a big role to play in the choices that people make.

We respond to influencers with our emotions and with feelings such as aspiration, envy, desire or approval and these can be incredibly powerful when it comes to making buying choices.

However, we may also integrate them into the more logical, evaluative way we make decisions. This is a state of affairs that we are increasingly settling into as the norm – 49% of consumers now say that they depend on influencer recommendations on social media to inform their purchasing decision.

Adapting the model of decision-making

If you’re looking at the way people make buying decisions online then the model of decision-making needs to be adapted to take into account the effect that influencers can have.

Another important factor to bear in mind is the impact of Word of Mouth on online buying, including when this takes the form of reviews. 88% of consumers say they trust reviews as much as personal recommendations.

One study found that the presence of review stars in product search results can increase click-through-rates by up to 35%.

There are also other ‘influences to integrate into any assessment of the consumer purchasing process online including:

• Trust in brand online presence – consumers don’t deal directly with staff or products so trust must be established and high
• Cybersecurity – 61% of consumers say they are more worried about cybersecurity today than they were five years ago
• The necessity of a well-designed website – preferably one that enables consumers to reduce their decision-making efforts by providing vast selection, information screening, reliability, and product comparison

Consumers and decision-making – rising to the challenge, online and off

• Omni channel marketing is very relevant, especially to online purchasing. Consumers gather information from a range of sources before making a buying choice, including a company website and friends and family.
  Action: Differentiate your marketing across as many channels as you can afford to do well – although many brands understand omnichannel marketing is important, few currently do it so it’s a simple way to create a competitive edge.
• It’s not always useful to ask your audience why they made a purchase. Whether online or off, the influence of System 1 thinking may mean that actually they don’t know.
  Action: tailor your marketing strategy to appeal to System 1 decision-making and focus on emotional resonance.
• Simplicity enables decision-making in any environment. The easier something is to understand, the more appeal it has. For example, consumers buying internet + TV or mobile phone plans are much less likely to invest time in comparing monthly download limits or text volumes and much more likely just to opt for unlimited plans because it’s simpler to understand.
  Action: simplify marketing from top to tail, including website text, product descriptions and marketing messaging.
• Previous positive experiences influence future buying choices. It’s not rocket science – if a diner enjoyed a dessert they are more likely to order it again. If a customer has previously bought online from a brand and had a positive experience the chances are they will want to repeat it.
  Action: invest in experience, from customer service to website navigation if you want to influence future buying choices, online and off.

Insight into the way that the consumers you’re targeting make purchases can be essential if you want to see genuine ROI from marketing and improvement in revenues and growth. It may be necessary to take into account both System 1 and System 2 thinking as well as the additional considerations that the online environment entails.

Brandspeak specialises in understanding how and why consumers make the purchase decisions they do – and how to influence those decisions.

For more information contact Brandspeak on +44 (0)203 858 0052 or at enquiries@brandspeak.co.uk

Additional resources used:

• https://www.ukessays.com/essays/marketing/factors-that-affect-online-shopping-decision-making-marketing-essay.php
• https://www.securitymagazine.com/articles/88621-study-reveals-disparity-between-consumer-cybersecurity-concerns-and-behaviors

Where does your brand stand on the issue of sustainable packaging?

Much more so than sustainability in the supply chain or daily operations, eco packaging is now right at the heart of the brand resonance discussion.

Consumers increasingly want to know whether product packaging is sustainable. It’s not just about the impact of packaging in terms of disposal but also how committed a brand is to a more environmentally friendly ethos.

The sustainability cause is now being taken up by household names that have not only come to recognise the opportunities for attracting customers and selling products but the potentially negative consequences of failing to live up to eco expectations too.

Who is doing it?

The process of switching to sustainable packaging is something that has historically been pioneered by smaller, boutique brands – often those that are dedicated to corporate social responsibility or an eco cause.

However, it’s no longer just SMEs that are keen to work with sustainable packaging options. Now, many household names are getting on board with an urgency that indicates just how central an issue sustainability has become.

Carlsberg Export – plastic six pack rings have become one of the most reviled pieces of packaging thanks to the endless photos of them endangering wildlife.

Carlsberg has now got rid of these completely for its Export six pack, replacing the plastic rings with pieces of a specially developed glue applied in small dots to hold the cans together.

Pantene, Tropicana and Häagen-Dazs – these are just some of the household names now signed up to an innovative new packaging scheme designed to be more sustainable.

The Loop scheme provides products in sturdy, reusable glass bottles or stainless steel containers. These can be sent back by customers in a shipping tote when empty and will then be cleaned and returned ready for reuse. The idea of Loop is to completely eliminate packaging waste and already Procter & Gamble, Nestlé, PepsiCo, Unilever, Mars Petcare, The Clorox Company, The Body Shop, Coca-Cola, Mondelēz and Danone have signed up to the pilots in New York and Paris.

In addition:

• PepsiCo North America is aiming to design 100% of global packaging to be recyclable, compostable or biodegradable by 2025
• Supermarket chain Aldi has committed to selling only recyclable, reusable or compostable packaging by 2025
• According to Coca Cola, 98% of its packaging is now recyclable
• Nestlé began removing packaging plastic straws from February of this year
• PUMA replaced the traditional shoebox with its ‘clever little bag,’ an environmentally friendly printed fabric bag, as a test project. The innovation won a design award and saved the brand over 8,500 tons of paper

What does the reality of eco packaging look like?

Traditional objections to integrating sustainable packaging have revolved around the lack of availability of viable, cost effective alternatives to materials such as plastic.

However, we’re now moving into new territory when it comes to eco options, from simple traditional choices, such as glass, to more innovative bioplastics.

• Recycled ocean plastic. Luxury hair and body product maker Captain Blankenship uses 100% recovered and recycled ocean plastic for its containers.
• Recycled regular plastic. Although repurposed plastic that has been made into new packaging is not the most eco friendly option it is an improvement on the use of virgin plastics.
• Compostable/biodegradable paperboard made from recycled paper pulp. When manufactured and disposed of properly, it is largely considered a renewable resource.
• Recycled and reused materials. Boutique brand Seed Phytonutrients uses bottles made out of 100% post-consumer recycled paper and lined with a post-consumer recycled plastic liner. The result is a bottle with 60% less plastic than a traditional one.
• Bamboo. Unlike the trees used for paper, bamboo actually grows more quickly when it’s cut. That makes it the number one renewable resource and an increasingly popular packaging option, especially for beauty products.
• Glass and metal. Both of these are considered to be 100% recyclable and so can be reused into infinity without any quality degradation, as demonstrated by the Loop scheme.
• Silicone is an eco-friendly material derived from sand. The main appeal of silicone is that it is much less wasteful to make than plastic and is also non-toxic.
• Bioplastics. A lot of research has gone into the use of bioplastics in packaging to replace fossil-fuel-based plastics. This is appealing but still has some issues, for example bioplastics can still harm wildlife.

5 key reasons big brands are moving to eco packaging

1. Improving brand competitiveness. Recent research revealed that consumer demand for recycled plastic packaging is outpacing corporate action in the UK – for brands that are able to get ahead there is significant market share to capture.
2. Influencing purchasing decisions. 68% of UK consumers say that the environmental impact of packaging affects their choice of brand and product.
3. Acknowledging the current consumer mindset. The government recently carried out a consultation on plastic waste and received a record number of responses, indicating that this is an issue consumers not only care about but are willing to be proactive about too. Overwhelmingly, respondents to the consultation wanted higher taxes on virgin plastics, as well as tax breaks for manufacturers using post-consumer recycled (PCR) content.
4. Responding to what customers want. Giving customers what they want is a simple way to secure loyalty and attract a new audience. Brands that are able to reformulate their product packaging to meet the needs of sustainable-thinking consumers have a lot to gain.
5. Innovation and creativity. Advances in technology and the range of options available for smart, sustainable packaging solutions provide opportunities to distinguish a brand in terms of innovation and strengthen an existing USP.

The risks of falling behind on the eco packaging front

It is now much more critical to make sustainable packaging options a priority as a result of the impact of:

• An evolution of consumer attitudes to packaging. 81% believe that packaging is a major environmental problem and 57% think it is wasteful and unnecessary.
• Consumers acting with their feet and with their wallets. 36% of Europeans (rising to 53% of millennial Europeans) are already boycotting brands as a result of concerns over packaging sustainability.
• Legal compliance and tax consequences. Governments are actively consulting on what consumers want when it comes to packaging law. The general theme is that businesses should pay penalties for continuing to use non-recyclable packaging. Increasingly, campaigners are calling on governments to introduce stricter legislation and ensure that businesses are 100% responsible for the cost of the waste that is the consequence of their packaging.

For the future of your brand

Sustainable packaging is no longer just a “nice to have.” It is increasingly becoming a quality benchmark for brands and a yardstick that consumers use when it comes to making purchasing decisions about products. That makes it a key investment in the future of every brand today, whether traditionally eco-driven or not.

Brandspeak provides a range of packaging research solutions. For more information contact us on +44 (0)203 858 0052 or at enquiries@brandspeak.co.uk