Want Deeper Customer Loyalty? Focus on your Brand Warmth Factor
by Diane Berenbaum
A new ground-breaking study has revealed the hidden drivers of brand purchase and loyalty. And companies relying on the classic marketing strategy of promoting product features and benefits may be surprised by the results.
The Relational Capital Group, with researchers at Princeton University, found that people assess brands the same way they instinctively perceive and judge people—on the basis of warmth and competence. This is the same model that governs how all humans perceive and build relationships. However, this new research showed that warmth and competence perceptions also influence consumer behavior. And they are highly predictive of purchase intent, likelihood to recommend and, most importantly, brand loyalty.
At a time when winning customer loyalty is more critical than ever, it is helpful to know the factors that lead to deep customer satisfaction are well within any organization’s grasp.
Through studies across 36 countries, researchers determined that warmth
is about a brand's intentions. It includes an array of traits such as friendliness, helpfulness, sincerity, trustworthiness and honesty.
is the ability of the brand to carry through on those intentions. It is reflected by traits such as intelligence, skill, creativity, efficiency and effectiveness.
The team examined eight national brands: McDonald's, Burger King, BP, Shell, Tropicana, Minute Maid, Tylenol and Advil and found:
Perceptions of warmth and competence (together) were found to account for:
ο 46% of the variance in consumers' intent to purchase and
ο 50% of loyalty to the brands studied.
Consumers ranked all brands (except BP) higher on competence than warmth.
Two of the "warmth" factors are especially predictive of brand loyalty: "honest and trustworthy" and "acts with your best interests in mind."
However, none of the brands met consumer expectations on these two critical dimensions. "Without those traits, genuine human trust and lasting brand loyalty are impossible," states Christopher Malone, Relational Capital's chief advisory officer.
He added, "It seems that in the eyes of consumers, the policies and practices of many companies consistently suggest that the company is primarily focused on advancing its own self-interest and can’t be trusted to do what’s in the best interest of the consumer."
The brands ranked highest were Tropicana and Minute Maid. On a scale of 1-10, their respective ratings were 7.9 and 7.8 on purchase intent and 6.8 and 6.6 on brand loyalty.
The primary brand loyalty factors for each of the restaurant chains were similar: honest and trustworthy, delivers on promises, acts in your best interests, worth the investment, high-quality assistance and listens well/understands needs.
Interestingly, consumers consider "delivering a consistent experience," "being a competent, capable, friendly and warm brand" as the expected price of entry for quick serve restaurants.
McDonald's' fans may be pleased to hear that their chain of choice bested Burger King on "popular and recommended" and "delivers consistent experience." Both chains ranked 7.6 on "honesty" and very closely on "acts in best interest" (McDonald's at 7.1 and Burger King at 7).
Yet, according to Malone, they are both underperforming against consumer expectations, which means there are opportunities for advancement; Burger King in particular. "Burger King might find differentiation by focusing on the two warmth factors, where McDonald's doesn’t yet have a real advantage," suggests Malone.
Despite Tylenol's recent product troubles, it ranked slightly higher than Advil on purchase intent (7.4 and 7.3 respectively) and brand loyalty (6.6 and 6.4). This might be attributed to Johnson & Johnson's sterling reputation for corporate responsibility.
To differentiate your organization and create lasting loyalty, you need to consistently demonstrate critical warmth and competence traits. Here are four strategies to help you get there:
Focus on the long-term; not short-term gains. Many companies are expected to reach specific financial targets and short term measurable goals; yet this propensity just perpetuates practices that may chip away at consumer confidence and trust. Resist the temptation to stay the course. When you identify the potential unintended consequences of this strategy (e.g. alienating customers and losing their business and referrals), you’ll find they might not be worth the short term gain.
Revisit your customer service strategy and the policies/ procedures that support it. Are they focused on minimizing cost and maximizing operational efficiency? If so, it's time to adjust practices so they build goodwill and trust. Senior Leadership needs to make this an operational priority and communicate its benefits, so the organization understands the value of the new strategy. Equally important, the leaders need to model the behaviors and attributes of warmth and competence with their own associates to gain their trust and confidence.
Develop your people to deliver warmth and competence. Think of your associates as your "brand" and develop their warmth and competence through soft skills and process training. This will not only help build customer loyalty, but it will also shift your culture as employee engagement and commitment increase. When associates are engaged, they become higher contributing and more satisfied employees, according to a recent study by Towers Perrin.
Update your website and social media marketing to create a new "face" to your brand. With your new strategies/policies in place, you want to be sure your marketing efforts align with your new positioning. Revitalize your website so it reflects your new "face." Use social networks to establish a new brand image and reputation. Be open to feedback and share honest, thoughtful responses, and fans and followers will surely recommend you to others.
As Malone says, "honesty and selflessness are hard to live by and even harder to deliver consistently." But, transitioning from a transactional approach to one based on warmth and competence is well worth the effort—it will change customer perceptions and create lasting, profitable customer relationships.
Diane Berenbaum is a long-time contributor and former editor of the MAGIC Service Newsletter. She has more than twenty-five years of experience as a consultant, coach, and facilitator. Diane is the co-author of How to Talk to Customers: Create a Great Impression Every Time with MAGIC® .