CPG brands lost many of their most reliable customers amid the tumult of the pandemic, and they are now working to win them back.
By Lance Brothers | Chief Revenue Officer, NCS
As brands try to understand where they stand in the pandemic economy, many of them are coming to a startling conclusion: Consumer loyalty has been greatly disrupted over the past eight months. This has led brands to refocus on loyalty win-back strategies.
Brands have always had to be mindful of consumer loyalties. But the rare confluence of challenges we’ve experienced this year means some brands experienced drastic changes in both loyal and non-loyal buyers. Several beer brands lost up to 4% of their previous buyers to competing brands, while some over-the-counter health products lost nearly 80% of their prior customers. Shifts in consumer loyalties are expected to continue into the winter months as consumers stock up for the colder months ahead.
Obviously, you never want to lose any customer, like a new customer who tried your product during the pandemic, but loyals are an especially valuable subset.
In conventional times, you can rely on your loyals to buy your product steadily throughout the year, and in even greater amounts during your seasonal sales rush. These are the customers you’ve spent years (if not decades) investing in and building brand equity with. Loyals are the most receptive to your marketing and constitute the bedrock of your market share. They’re your foundation, the heart of your brand.
The past few months have been anything but conventional, though, and some consumers aren’t exhibiting their usual brand affinities. Many brands have had the unnerving experience of watching their loyals defect to the competition.
It’s not necessarily the brands’ fault. Many consumer packaged goods brands have experienced supply chain issues in the pandemic, resulting in inventory problems and forcing otherwise loyal customers to dabble with a different brand. (OTC brands have had a particularly hard time keeping their products on shelves at stores — 77% of U.S. retailers were out of stock for pain relievers and allergy medication for at least some part of the day by the end of the summer.) On the flip side, tough economic times can also cause consumers to be more open to trying new brands. Shoppers who normally seek premium brands may buy value brands out of necessity to make ends meet.
Clearly, the past seven months have fundamentally altered consumer behavior. Consumers are staying home more, cooking more, and taking on more DIY projects; shifts in brand loyalty might be a reflection of those larger changes in the CPG market. Some beer brands are just better designed for home-confined drinking.
Whatever the case, consumers have been more willing to experiment with new brands in the pandemic economy. It’s a welcome change for brands that have seen an influx of new trial buyers perhaps, but a nightmare for brands on the wrong end of that shift.
The good news is brands can identify those lost buyers, and there’s substantial evidence brands can even win those customers back. By identifying the customers who stopped buying your brand once the pandemic hit but continued buying other products in the category, you can activate campaigns aimed at winning back these lost buyers.
Past purchase behavior is the most reliable way to identify lost loyal buyers. Combining actual in-store purchase behavior with advanced modeling allows brands to find and build unique audience segments based on specific customer strategies. If you’re looking to bring back loyal buyers, you can focus on consumers who have historically bought your products, but who may not have purchased recently. With this unique audience segment in place, you can develop relevant campaigns and offers to connect with these households.
Market research has also shown that consumers have been particularly receptive to advertising during the pandemic economy. Brands that have struck the right tone with their creative (no small feat during these sensitive times) have been successful in both attracting new and lost buyers and increasing sales among existing buyers.
Combine that effective creative with effective audience targeting, and you have a chance to let your lapsed buyers know how much you’ve missed them — and what they’ve been missing by buying the competition.
The start of 2020 was riddled with uncertainty. Consumer behavior was unpredictable, and it was nearly impossible for brands to know how the pandemic would affect their brands in the long-term.
Life isn’t back to normal, but consumer behavior has stabilized a bit. Brands know what they can reasonably expect each week in terms of sales, and that has given brands the ability to take stock, dig deeper, and assess the current state of their loyal customers.
While brands may not like what they’ve learned about their lost loyal buyers, that’s also the necessary first step for recouping any losses and rebuilding their brand fans around the fickle nature of the current economy. Brands that work to win back the ones they’ve lost will succeed in this unsteady economy and ensure their success for whatever comes next.
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