A brand lives or dies by the actions of its customers. A compelling marketing strategy can hone in a customer’s needs and wants. But it will eventually fall flat if it doesn’t respond to changing customer dynamics.
Customer dynamics refer to the evolving behaviors, preferences, needs, and expectations of customers over time. These actions play a crucial role in building or eroding brand equity, which is the value and strength of a brand in the marketplace. Firms not only need to understand their customers, they need to adapt with them over time.
When assessing the strengths and weaknesses of a marketing strategy, firms can gain insights by looking at not just the opinions of existing consumers but also assessing how non-customers and past clientele view their products.
Current customers are vital to providing ongoing feedback and areas for improvement. Clients can offer insights into actual use cases. Firms should stay aware of whether users employ products in novel or unintended ways to identify possible new revenue streams. A strong current customer base can influence brand perception through referrals and social media.
Brands that track industry trends as well as consumer pain points can stay one step ahead of market changes. Happy, engaged current customers can also serve as testers or guides for new products. They can informally advise firms if new or potential products are actually desired or wasteful.
Backed by a strong sales team as well as dedicated customer service, brands can strengthen brand equity by using customer data to create personalized experiences, implementing loyalty programs to reward repeat customers and keeping clients informed about new updates and company news.
Relying only on current customers for feedback can result in confirmation bias, however. Firms should therefore also investigate why non-customers are not convinced and why past clients left.
Non-customers can offer insights into barriers to entry or perceptions preventing them from becoming customers. Their preferences and behaviors can indicate broader market trends and untapped opportunities. As non-users, this cohort may harbor misconceptions or lack awareness about the brand or its offerings, signaling a weakness in brand or product messaging.
To attract non-users, brands can commission detailed market research to assess why they aren’t choosing a brand. Firms can strengthen or tailor marketing specifically for the non-users, increasing brand visibility and correcting any misconceptions through strategic advertising and public relations. Sometimes, a special offer or discount can be the first step towards converting non-users.
Past users can also help a firm uncover weaknesses in their offerings. Lapsed consumers can reveal shortcomings in products, services, or customer experience. Just as positive word-of-mouth can build brand equity, an unhappy customer may contribute to eroding brand equity through negative comments to their peers.
Firms have a few ways to address past customers. They can conduct exit interviews or surveys to understand why they left. Companies can launch win-back campaigns, which are designed to re-attract past customers with improved offerings or incentives. It’s key that firms directly address issues that led to customer churn and remain open to feedback.
Feedback from users, paired with analytics, can help firms understand the sentiments and behaviors of different customer segments. An openness to adapting products or services in response to changing customer dynamics, and updating brand messaging as needed, can help firms navigate these multiple segments at once.
Why Customer Dynamics Can Build (or Erode) Brand Equity
