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Establishing A Relationship With Consumers Is A Game Changer For Modern Brands In An Ever-Changing Marketing Landscape

In brand relationships, marketers and brand managers have a powerful tool to employ when influencing firm value and consumer behaviour in an ever-changing marketing landscape.

Predictive CRM, omnichannel relationship marketing, brand relationship metrics, using chatbots to encourage stronger relationships and building more meaningful relationships through brand experience. 

All these contemporary marketing tools or “buzzwords” have one thing in common: a focus on the brand as a relationship. Indeed, as marketing strategists, Bonchek and France famously said, “If the first three waves were brand as object, ideas, and experience, the next wave will be brand as relationships”. After all, “establishing a relationship with consumers is a game changer for brands”, according to branding expert Tim Halloran. Surprisingly, existing published materials have not offered much understanding of the effectiveness of consumer-brand relationships as a marketing tactic. To add to the complication, companies and brands spend billions of dollars to encourage consumer-brand relationships, yet many of them do so without a good understanding of their activities.

This is particularly disconcerting because the effectiveness of consumer-brand relationships in influencing ever-desired customer brand loyalty appears to be even more pronounced in light of the concurrent emergence of the “attention economy.” That is, the experience of being a consumer in contemporary markets is exhausting and involves being universally targeted by myriad organizations, brands, and other stakeholders in their competition for eyeballs and click-throughs. One way that people might successfully navigate this chaos is to retreat, essentially placing greater distance between themselves and the source of their stress and relying more on familiar, easily justifiable structures, such as existing consumer-brand relationships. 

If this intuition is correct, then we should see that over time, the link between consumer-brand relationships and loyalty has become stronger. This is exactly what ample industry evidence and my own personal experience suggest – the positive influence of brand relationships on customer brand loyalty is increasing over time such that it is stronger in more recent years. This powerful effect of time speaks to increasing relative importance of consumer-brand relationships as a strategic asset in general and brand relationship investments in particular. 

Taken together, this implies something of a managerial imperative: consumer-brand relationships are already an important influence on downstream loyalty and I forecast this influence will likely continue to grow in the coming years. Importantly, standard cross-sectional survey or experimental approaches do not account for these temporal effects and hence fail to reveal trends of stability and change over time. Thus, it is important not just to look at the overall contribution of brand relationships in predicting loyalty but also to consider these effects over time using multiple studies across years.

Marketing departments are routinely under pressure to show the value of their marketing spending. To that end, a 1% increase in consumer-brand relationship investment is on average associated with a .44% improvement in customer brand loyalty. This shows that it is important to invest in brand relationships and that consumer-brand relationships possess one of the highest effectivenesses among different marketing instruments. Thus, in brand relationships, marketers and brand managers have a powerful tool to employ when influencing firm value and consumer behaviour in an ever-changing marketing landscape.

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Written By

Dr. Mansur Khamitov (Ph.D., MBA) is an assistant professor of marketing at Nanyang Business School, NTU Singapore. His research on the subject was done in collaboration with Xin (Shane) Wang and Matthew Thomson, Western University. You may read their research published in the Journal of Consumer Research here.

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