Consumers today are less loyal to brands than ever before. Even if they have been buying the same make of running shoe for years, everything changes when a new product arrives that gives them something extra – whether a personalized or more intuitive shopping experience, or membership to an active community of likeminded individuals on social media.
The change in shopper behavior is being driven by a combination of two major trends in CPG. “Liquid expectations” and the data-capture enabled by the internet of things are converging to make the CPG market considerably more competitive. In turn, many companies have adopted the mantra “every product is a service waiting to happen”. They recognize that buying the product is just the beginning of the journey for their customers.
But how can CPG companies ensure they are creating the most outstanding services and experiences? How can they stay one step ahead of their rivals in delighting – and retaining – their core customers?
The emerging world of living services
The most forward-looking CPG companies are developing services that focus on giving each consumer exactly what he or she cares about most. These companies are sympathetic to their consumers’ needs, concerns and preferences to an unprecedented level of detail.
Perhaps the most striking aspect of these new services is that they do not stay still. They morph and evolve to reflect changes in the consumer’s lifestyle and habits. Truly, they are “living services.”
Consider a household sunscreen brand. Perhaps, in a bid to differentiate its product, the brand has recently introduced a mobile service that updates its customers about the UV index where they live and nudges them to apply more lotion on sunnier days. This service adds a certain amount of value to consumers, but a living service would take it one step further.
A living service would be tailored to one consumer in particular – in this instance, an office worker in a U.S. city who takes lunch at 1 pm on weekdays and eats in the park when their schedule permits. The sunscreen brand’s living service would recognize this pattern and send updates at 12:45 on hot days when the user’s cloud-based schedule appears less busy. On weekends, it would anticipate that the customer might be eating lunch at different times and change the nudge patterns accordingly. And then, if that office worker takes a business trip far south of the equator, the service will anticipate that sunburn will be less of a worry and stop sending updates that may otherwise have become a nuisance.
By adding this personal touch, a living service will delight (and win) more consumers than its competitors – whose one-size-fits-all services do not satisfy specific needs.
Marketing is key to living services
Living services will revolutionize a market that has already changed enormously in recent decades. We should expect everyone from the CEO down to become involved in developing and implementing them in the near future. But what role will marketing play in this revolution? How can they ensure they are driving, not simply following, this business-critical imperative?
We see leading CPG marketers using their skills in two areas that are key to successful living services: defining consumer archetypes, and developing a new level of customer insight.
Defining consumer archetypes
Marketers understand consumers better than anyone else. The skills they have honed in identifying archetypes – from a middle class office worker to a working mother in the suburbs – will be central to inventing, designing and implementing living services. Marketers are best placed to say which consumers would most value a living service and which services will drive the most new sales.
Deep into the mind of the consumer
In recent decades, marketers have used focus groups and consumer surveys to segment the market. Successful living services call for a more in-depth, almost anthropological understanding of individual consumers – using ethnographic techniques to isolate pain points, habits and obsessions. This is an innovative approach, and marketers should ensure they are leading the activity.
Using empathy, creativity and wide-ranging customer knowledge, marketers will help amaze, excite and reignite consumer loyalty in a tough market. In our next article, we explore the key steps.