In a chat with BrandWagon’s Meghna Sharma, Silverstein shares his insights on what brands must do to forge an emotional connection with consumers.
Human beings are curious. They love to explore. And they love to shop. And if a brand needs to stand out among the million brands out there, they must understand the consumer, says Michael J Silverstein, senior partner & MD, The Boston Consulting Group and co-writer of Rocket: Eight Lessons to Secure Infinite Growth. In a chat with BrandWagon’s Meghna Sharma, Silverstein shares his insights on what brands must do to forge an emotional connection with consumers.
Social media has changed the way brands market themselves. How can brands effectively invest in such virtual relationships with their customers?
There is a huge opportunity associated with social media. Your single best consumer is your current consumer. Almost everyone has 10 friends; some have 300 while others over 1,000. That one person can influence all the others. One of the most successful campaigns in the US was ‘Real Women of Philadelphia’. The campaign for Philadelphia Cream Cheese encouraged home cooks to submit videos of themselves online, preparing recipes with the product. The contest has been credited with boosting sales and was praised for its social element — hosting videos on YouTube, sharing recipes on Facebook and Twitter, and so on. Over 5,000 people submitted recipe videos for the contest and the campaign website saw eight million views over eight weeks. The campaign increased the size of the cream cheese market by 15% that year. So, it’s about helping consumers be your advocates.
But there is a downside: the rule I call “10 to 300”. If you satisfy a consumer, she will tell 10 friends but if you dissatisfy her, she will tell 300 . So, you need to read every complaint and respond to it. You need to have a direct connect with your customer.
With an increase in disposable incomes, do you believe the profile of the luxury consumer has changed? How is a luxury buyer in an emerging market different from that of a developed one?
India is a unique market; it’s one of the fastest emerging markets in the world. It has multiple segments of consumers. Every year, it has around 10 million university graduates that will fuel the future. Not all are getting high-paying jobs, but they are getting jobs. The cream is coming to urban markets like Mumbai and Delhi and buying cars and bikes. They are creating opportunities for companies to enter the market and provide a product.
Indian consumers don’t buy the usual luxury goods. In the US, it’s about your home, automobiles, children’s education, clothes and jewels. In India, real estate is among the most expensive in the world; the luxury car market is smaller here. Indians don’t jump for Italian and French designers; they prefer custom-made and they are willing to spend a higher percentage of their income on their kids’ education. In jewellery, Indians buy unbranded gold/diamonds. I believe luxury in India is a high-growth market, growing 15-20% every year which makes it an attractive market.
The truth is: more money is being spent by people over 40 than people under 40. People under 40 are loud about what they buy and hence set a trend. I would describe it as an error in strategy by companies which focus only on this segment of customers.
With the packaged foods industry surrounded with controversies in India lately (Nestle, Mother Dairy, cases in point), what can brands in this space do to regain lost trust?
Handling a crisis is a three-step process. Number one: if you have a problem, be very specific about what you are going to do about it. You have to be very clear about your apology and you have to communicate to the consumer that you take it very seriously and your objective is to tackle it. Number two: understand the root cause and find out how to ensure there is no recurrence. Number three: how do you change your design to make yourself fool-proof? You need to build a system that provides you some protection and you use it as a point of differentiation. One great thing about consumers is they have a short memory. So, five years from now, most crises will be forgotten, particularly, if the company took the right corrective measures. So, it’s a chance for learning.
With the e-commerce boom in India recently, how do you see the traditional retail scenario panning out?
I don’t believe land-based retail is dead. Many consumers buy only after they have touched a product with their own hands. So nothing will make traditional retail obsolete. But retail must progress technologically. One of the reasons for consumer dissatisfaction is when a store doesn’t have a particular inventory in a particular size or colour. People can create perpetual inventory systems and they can make it available to consumers. So, before one goes into a store, they will know if it has what they want. Hence, before she even enters the bus, she can ‘click and collect’. This is a great use of technology which will make land-based retail more competitive against the electronic one. You have to be omni-channel in a cost-effective way. And the faster you do this, the better for you. A leader will always have an advantage over its followers.
The author can be reached on Twitter @meghna0101