What You Can Learn from a Fan(atic) About Engagement
Are you ready for a “Tacoasis”? It definitely is nacho average hotel. This summer at a location in Palm Springs, Calif., Taco Bell is opening a boutique, branded hotel. The Bell: A Taco Bell Hotel and Resort will feature “Bell” hops, fire sauce packet-shaped floaties in the pool, and other Taco Bell-themed amenities for the 18+ Taco Bell superfan. According to the statement from the company, everything from guest rooms to breakfast and poolside cocktails will be infused with a Taco Bell twist. The gift shop will even feature exclusive apparel.
Taco Bell fans are some of the most loyal and expressive. If you have any doubts about their dedication to the brand, just check out the Taco Bell tattoos (tacobell.com/tattoos) of some superfans.
Now, while most can’t boast that kind of dedication, every brand is looking for ways to grow engagement, customer loyalty, and increase customer retention. The key to it all: creating — or finding — brand ambassadors or fans.
But what makes fans — or fanatics — the “Holy Grail” for brands? Merriam-Webster’s online dictionary helps us bring some context to the question. It defines the word fanatic as “a person who is extremely enthusiastic about and devoted to some interest or activity.” We can add “or brand” to this definition, especially for the topic we are discussing in this article.
The Latin adjective fanaticus, a derivative of the noun fanum, meaning “temple,” originally meant “of or relating to a temple.” It was later used to refer to pious individuals who were thought to have been inspired by a god or goddess. In time, the sense “frantic, frenzied, mad” arose because it was thought that persons behaving in such a manner were possessed by a deity. This was the first meaning of the English word fanatic. This sense is now obsolete, but it led to the meaning “excessively enthusiastic” and the noun fan, meaning “enthusiast,” is a shortening of the word fanatic.
Fans — true, devoted fans of a sports team, rock band, television show, or anything, really — can sometimes show an “excessively enthusiastic” attitude when it comes to their team/performer/fandom/brand. Just take a look at soccer (or football, to our European friends) fans. They are fully engaged with their favorite teams, buying merchandise, or planning vacations or watch parties around important matches. They are, in many cases, a walking, talking advertisement for all things soccer.
So how does this correlate to brands and brand strategies when it comes to customer retention and engagement?
Customer retention plays a large role in helping a company grow a healthy bottom line. According to Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 75%. Gartner Group statistics report that 80% of a company’s future revenue will come from just 20% of existing customers. And Lee Resource Inc. reports that attracting new customers will cost a company five times more than keeping an existing customer. There is something to be said about Ben Franklin’s age-old idiom that “a bird in the hand is worth two in the bush.” In the case of customer retention, that certainly rings true.
But what’s more important than just having customers is having emotionally-engaged customers who, in some cases, can promote and advertise the brand even more than the brand itself. They can become a brand ambassador.
According to a report by Motista, “Leveraging the Value of Emotional Connection for Retailers,” customers who feel an emotional connection to a brand are far more valuable, in some cases spending twice as much as customers who rate themselves as satisfied with the brand (CSAT). Additionally, these emotionally connected customers — or fans — have a 306% higher lifetime value (LTV), stay with a brand for an average of 5.1 years versus 3.4 years, and will recommend brands at a much higher rate (71% versus 45%).
InMoment’s 2018 U.S. Retail CX Trends Report asked if consumers felt more connected to brands or to specific products or services. More than half of consumers gave a mixed response, saying that it depends on the brand or product/service. Slightly more (26% versus 21%) of customers said they tend to feel more loyalty to brands versus products. Millennials were the most definitive group, with 30% saying they feel loyal to brands.
Knowing why customers commit can help to inform a large range of business activities, from brand messages and new product development, to demand-generation marketing campaigns and experience design.
For those brands that achieve loyalty status with their customers, the benefits are both tangible and significant.
Long-term relationships: 77% of consumers say they’ve held relationships with specific brands for 10 or more years. This is even true for 60% of millennials.
More, more, more: 61% of loyal customers go out of their way to buy from a brand, and 60% will make more frequent purchases (that number rises to 70% among millennials); 50% will purchase more products.
Tell a friend: 75% of loyal customers will recommend a brand to friends and family.
One of the marketing buzzwords of 2019 is experiential marketing. This trend, based on millennials’ affinity for experiences over material goods and products, has started spilling over into other generations and is impacting how brands interact with consumers.
Every single touchpoint with consumers — from the first ad they see all the way to the purchase of the product or service — matters. Personalized experiences offer brands a way to engage with their customers and cut through the clutter. These branded, personalized experiences elevate customer service and create a positive interaction that fosters ongoing loyalty. It engages consumers in a memorable way that forms long-term emotional connections.
Statistics from a recent study by Epsilon show its importance. If a business offers personalized experiences, 80% of consumers indicated they are more likely to do business with them. Consumers who believe personalized experiences are very appealing are 10 times more likely to be a brand’s most valuable customer — those expected to make more than 15 transactions in one year. Consumers who believe companies are doing very well on offering personalized experiences shop three times more frequently.
Offering these branded, personal experiences brings dollars — and in many cases, big money — to brands.
But remember, as quickly as brand loyalty can come, it can also go. Brands shouldn’t get too comfortable. While InMoment’s 2018 U.S. Retail CX Trends Report research demonstrates that today’s retail customers can be quite loyal, there’s a limit to their commitment. Nearly 50% of customers say they’ve left a brand to which they were loyal to go to a competitor that is better at meeting their needs. Failing to stay relevant will accelerate the exit of even the most loyal customers. To learn more about how to apply these lessons to any brand, see Five Ways to Build Your Own Brand Fan(atics).
Related story: Five Ways to Build Your Own Brand Fan(atics)
Denise Gustavson is the Editorial Director and Special Projects Editor for the Printing & Packaging, and Publishing Group, which includes Printing Impressions, packagePRINTING, In-plant Graphics andWide-Format Impressions magazines, among other brands. She is also the Editor-in-Chief of Wide-Format Impressions.