Sure, you like certain brands more than others, but do those brands really get you?
A new survey by Boston-based marketing consultancy C Space found that consumers often have that kind of relationship with some brands. And customers reward those brands with somewhat extreme brand loyalty. The winners include Mary Kay Cosmetics; Ace Hardware; and that esteemed cult brand, Trader Joe’s. The losers: Obamacare, Spirit Airlines and the federal government. (Yes, C Space considers all of those entities brands.)
C Space’s inaugural report on the topic assigns a Customer Quotient (CQ) to each brand. The rating is based on interviews in April with 15,000 consumers. The methodology was pretty straightforward: C Space asked the consumers open-ended questions about which brands really "got" them. The company was looking for responses that touched on five key assets of a customer-focused brand that the firm identified as integral to such a brand’s success: relevance, openness, empathy, end-to-end customer experience and emotional rewards.
"Our theory was that a customer-centric company should feel different to consumers to ones that aren’t customer-centric," says Manila Austin, VP of research at the company. "Because everyone today wants to be customer-centric."
Not surprisingly, certain categories like household beauty/personal care, supermarkets and food/beverages tended to have a natural advantage. On the other end, if you’re in the government, telecom or health care, engendering customer loyalty is an uphill battle.
The brands that scored the highest also tended not to be big advertisers. C Space believes that 21st century brands should rely on advertising less and take more time to understand their customers. Here’s where it gets tricky: Though C Space has identified brands that are doing a good job connecting with customers, it is far from establishing a road map for doing so. A customer-focused brand may be a bit like former US Supreme Court Justice Potter Stewart’s famous quote about obscenity: It’s hard to define, but you know it when you see it.
Measuring brand strength
One standard method of measuring brand power is to devise a formula that takes into account a company’s financial heft (like its market cap) and conflate that data with the role consumers say the brand plays in purchase decisions and the brand’s perceived competitive strength. This is the way Interbrand compiles its 100 Best Global Brands list, the industry standard for such measurements since the early 2000s.
Some have taken an alternate approach. The Net Promoter Score, introduced in 2003, is based on customer recommendations. If more people would recommend a brand to a friend than not, then a brand gets a high NPS and vice versa.
By using a different methodology, the NPS has a much different list of top brands. Last year, Tesla had the highest NPS, but the list included head-scratchers like Kitchen Solvers and the Ridge Creek Golf Club.
Since many NPS winners also made appearances on C Space’s list, it begs the question of why the CQ was necessary Austin says NPS is a useful tool, but it’s one-dimensional. C Space’s clients often struggle to show movement on their NPS and were looking for deeper data.
Today’s customer-centric brands
Still, the calculus of what makes a consumer-centric brand is still mysterious. When asked why Trader Joe’s has such a high CQ, Austin speculated that exclusive items like green chili enchiladas and frozen lamb chops may keep customers coming back.
"I think there’s a sense when you’re there that you’re part of a cadre of people that want to shop there and appreciate Trader Joe’s," Austin says. "There’s a bit of an exclusivity or private club [feeling]."
How to be more customer-centric
In theory, every company should be customer-centric. For whatever reason though, many aren’t. This, of course, is what makes marketing such a hard discipline. "At a time that we hear from our clients that growth is so hard and that loyalty is so fleeting, we believe from the work we’ve done that the companies that understand consumers as people that that was a place to find growth in the 21st century" says Jessica DeVlieger, SVP of sales and marketing at C Space.
C Space’s vision is that by focusing a company’s energy on improving those five key assets, they might become more customer-centric and thus experience more growth.
In particular, Austin says a brand should look at where their biggest gaps are in the CQ. If they’re not perceived as empathetic, then they should figure out how to become more so. "The key is connecting executives at companies with real people so they actually develop empathy," she says.
Hayes Roth, founder of H.A. Roth Consulting, says that the epitome of the modern customer-focused company is Zappos, which is so obsessive about its customer service that it’s almost cult-like. "They really changed the game arguably," he says. "They trained their people to be very disciplined about it."
Zappos didn’t make the NPS or CQ list, but parent company Amazon scored high in both. A now-famous (and disputed) New York Times expose of Amazon’s corporate culture described a workplace in which the focus on the customer was so strong that employees were expected to work around the clock and on weekends and where it was common to see adults break down crying.
That story’s veracity aside, few would dispute that Amazon has provided a very user-friendly environment for customers and is continually seeking to improve. The company’s success also illustrates that there are no quick fixes that enable a brand to become more customer-centric. While Austin notes that a customer-centric brand should feel different for consumers, the same is probably true for people who work at the brand as well.
Top 10 (Mary Kay had the highest CQ)
- Mary Kay
- Ace Hardware
- Trader Joe's
- Johnson’s Baby
- Market Basket
- Colgate Palmolive
Bottom 10 (Obamacare had the lowest CQ)
- Time Warner Cable
- Electronic Arts
- Frontier Airlines
- Spirit Airlines