How to reach the independent consumer: the art of persuasion

Most consumers follow people on social media because of the content they produce, not because they are famous. It’s the micro-influencers, niche experts, and online communities that are driving behavior, not celebrity endorsements – which at their best drive only a macro view of the brand and at their worst are seen as inauthentic.

The product demonstrations and discussions that take place in online social spaces directly impact buying behaviors in ways traditional marketing could never achieve. They give everyone the opportunity to share advice, experiences and reviews. People trust what their favorite influencers say and buy products they recommend.

Many brands have struggled to adjust to this new world, where they have less control over what’s said about them, and where what they want to say can get lost in the noise. However, this is also an opportunity, if they can create a two-way conversation with the consumer to help shape their own innovation and engagement strategies.

Those that are skilled at listening to the flow of information, and know how and when to best participate, can gather priceless feedback about their brands and what might improve them.

Influencing future consumption choices

CP companies that want to become consumer-centric must create an authentic and effective relationship with the influencer economy. Most are investing in building these relationships, but they need to be cautious about how they select and manage influencers, and how they monitor their performance. Who is the best fit for the brand, its values, and the aspirations of its target audience?

Brands can maximize their return on marketing spend by engaging with a greater number of micro-influencers and the platforms they use, rather than committing to relatively few individuals. But with a larger group, there’s more risk. Companies need to manage influencer performance at a new and detailed level, to measure the impact they have on the brand and purchases.

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The demise of third-party cookies will be felt differently across consumer-facing companies. Brands with nascent or non-existent direct-to-consumer channels will find it harder to get enough first-party data to support their marketing campaigns. Larger retailers are likely to have more first-party data, as their websites attract more consumers; this should make their shift away from third-party cookies easier.

In fact, many retailers see an opportunity here. They are establishing their own retail media networks by gathering data and creating brand promotion opportunities, which they can sell. Working with these networks could be a preferable option for a brand. They would be selling to consumers who are already in a buying context – they will be shopping, not scrolling.

As retailers create these new promotion opportunities, they need to be mindful of the trust consumers are showing them. If it feels like they’re only being exposed to big brands with deep pockets, that would be a turn off. What they value is curated options that feel personal.

Striking the right balance between data gathering and data privacy

It’s important to optimize online experiences, but this won’t generate the volume of data that effective digital marketing requires. A priority now for brands is to think strategically about acquisitions and partnerships that will get them the data they need. Retailers should be investing in their retail media capabilities to build profitable, long-term partnerships with brands.

First-party cookies are not going away. Mastering their evolving use is critical for companies that want to grow digital traffic, better understand their consumers, and keep their needs at the center of the business.

All companies must be transparent about how they use data and make it as easy as possible for people to opt out. If it’s too complex for the consumer, they will leave the site rather than work out how to change their data-sharing preferences. Simplicity is also important for those consumers who are willing to share their data – it needs to be easy for them.

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Loyalty programs are increasingly transactional. Consumers become members to access discounts and deals. Their commitment to the relationship is only as strong as the last offer they received, which is a weak kind of loyalty.

This changes the dynamics of a successful loyalty program. It’s critical that consumers feel the exchange of value is fair. To secure their participation, brands and retailers may need to accept smaller margins. That is the price to pay for what now counts as loyalty, and for the data a successful program brings them.

Consumers are more willing to share their data, but they want value in return. Some retailers can cover this cost by giving brands access to their media networks, as this is an effective way for them to target and engage consumers. Without the consumer data needed to understand what consumers want and the distribution networks needed to give it to them at the point-of-sale, brands are becoming ever more reliant on retailers. 

Creating incentives that build consumer trust

Retailers have access to a volume and richness of consumer data that creates significant new opportunities. By using loyalty programs to gather even more data, they can create more targeted discounts and use data-derived insights to help brands reach specific consumer profiles.

While retailers can leverage granular datasets to improve performance, consumer products companies have access to broader behavioral datasets that help with targeting and segmentation. If they work with retailers, they can find the sweet spot between holistic behavioral datasets and distinct purchase decisions.

Both retailers and CPG companies need to capture these opportunities while building trust with consumers as data security concerns grow. For example, they should let consumers see that they are investing in cybersecurity and taking data protection seriously. And it must be easy for consumers to see how they benefit from sharing their data.

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