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Issue Date: May 2004

Customer loyalty expectations shuffle ad targets

May 2004
Robert Passikoff

Advertisers and media planners who wish to provide more effective, and profitable, media plans may have to forsake their historic reliance on demographics and add a new metric to their ad planning tool boxes: customer loyalty expectations.

Historically speaking, when customer expectations increase, it is a sign that customer needs are going unmet. When customer needs are unmet, customers defect to brands that talk to them in believable ways and can fulfill the increased expectations.
Rising expectations also offer opportunities for brands, if they can figure out how to capitalise on those trends. But how? Brands can identify and leverage opportunities by tracking the direction and velocity of changing customer values, so they can better communicate with customers.
Decreasing expectation levels, on the other hand, also provide a good index of consumer behavior, because they show that consumers feel disenfranchised and ignored by marketers, and are trending increasingly to think of products, services and even brands as commodities.
Brand Keys, as part of its annual Customer Loyalty Index, examined consumer expectation levels among Baby Boomers and Generation X consumers. The analysis of 32 product and service categories revealed some surprising variations in expectation trends and some important implications that advertisers need to take into account if they wish to maintain profitable, differentiated brands in the future.
For the past four years, Gen X loyalty expectations (typically pretty flat) have been rising, significantly so in the past year. Baby Boomers' expectations, on the other hand, (a group that historically logged the highest expectation levels of any segment examined) have been dropping.
Patterns reflect corollary trends in marketing, branding and advertising initiatives. Industry observers have noted that more time, attention and marketing dollars have been spent against Gen Xers than Baby Boomers.
Limited attempts to address the Baby Boomer cohort have traditionally been anchored in stereotypes with references and symbols like peace signs, Woodstock imagery and rock and roll with positionings that imply (even takes for granted) that Boomers are self-centred. Brands that have based their development on targeting of the youth dollar suddenly have to come to grips with a whole new market. Boomers cannot escape history either as time marches on.
Marketers must realise this and act accordingly and begin shuffling their ad targets, instead of just saying they understand. Those who continue with old patterns will find that they are forcing a significant consumer group down a path where only price differentiates them from their competitors. To do so is ever more risky at this time in marketing history.
Robert Passikoff is resident: Brand Keys,
For more information contact Len Stein, Visibility, 914 712 2610

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