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Consumer expectations are changing: Are marketers keeping up?

What can marketers do to keep up with this seismic shift in consumer expectations where hyper-personalised relationships with brands are the only way forward? According to Cheetah Digital’s new Digital Consumer Trends Index, 67% of consumers do not trust the advertising they see on social media platforms. And more than half (63%) don’t trust social media platforms with their data.

 In a recent Cheetah Digital-hosted webinar, Teresa Sperti, founder and director at Arktic Fox doesn’t find the results surprising at all. 

“Over time, there has been an erosion in the level of trust for social platforms,” she points out. “As a whole, this has led consumers to be increasingly wary about the information they provide on these platforms and how their data is being utilised.” 

She credits this erosion of trust to a couple of things. First, consumers are concerned about the social impact these platforms have on society; and secondly, consumers are worried about the approach that’s taken to harvest their data.

Consumer trust in social media ads on the decline

A recent Washington Post poll finds that, of all the large tech companies, social platforms like Facebook and Tiktok have the lowest level of consumer trust. In fact, 72% of internet users rated their level of trust in Facebook as ‘not much’ or ‘not at all’ to responsibly handle their personal information and data on their internet activity. And roughly six in 10 distrust TikTok and Instagram, while slight majorities distrust WhatsApp and YouTube. This decline in trust mirrors Cheetah Digital’s findings to a T. 

Adam Posner, CEO and founder at The Point of Loyalty, and one of the panellists in the webinar agrees, pointing out the disruptive aspect of social ads. “The ads interrupt and are, oftentimes, irrelevant. But even more, they’re invasive. That aspect of social ads feels creepy, which works to erode consumer trust as well,” he says.

It’s ironic when you consider that social platforms emerged as a way to drive engagement with the audience. Since it’s moved into a sphere of profit over people, they’ve moved further from their reason for existence. 

“These days, it’s all about monetisation of the platforms. As they’ve increased the amount of advertising, consumers have become bombarded with all kinds of messages,” Teresa says. “It’s become hard for consumers to decipher what’s ‘fake news’, if a product is quality or if they’re potentially being taken for a ride.”

Adam brings up the idea that, on these platforms, the consumer is essentially the product. “It’s a real awakening,” he says. “Consumers are realising that if they’re the product through their data, then that means they’re valuable. So, naturally, they’ve become even more protective over their data.”

It seems what that’s creating is a data economy as a consumer. We’re going to see a shift to a value exchange where the platform says give me your data, and I’ll give you something to make it worth your while. That’s when social platforms will start regaining consumer trust.

Teresa adds, “Customer expectation is changing. The brands that are going to win moving ahead are those that have earned the right to effectively communicate, earned the right to be entrusted with data and are able to retain the right to utilise that data. And a lot of that comes back to control and consent.”

Meanwhile, Cheetah Digital’s report also shows that email still reigns supreme when it comes to driving sales, beating paid social and display advertising by up to 228%. “The statistics don’t lie. We’ve gone back to the future of marketing, in a sense. In light of all the creepy advertising, marketers are going back to the basics of building a brand. And that’s putting the spotlight back on email.

Email continues to be a trusted channel. At least 90% of consumer brands have emails and it’s widely accepted. So it’s a great foundation and super effective for marketers.

A new era of ‘relationship marketing’

The findings in Cheetah Digital’s report signal a new era of relationship marketing. 63% of consumers are willing to pay more to purchase from a trusted brand. Almost half (40%) of consumers are more likely to take part in loyalty programs compared to last year. And 24% of consumers left their favourite brand because they didn’t feel valued as a customer. 

Relationship marketing is personalisation on a deep one-to-one level. It’s really about understanding your consumer, listening and building a relationship with them. It’s marketing to them the things they actually care about. Because that’s what relationship marketing is all about, caring about each other.

“There are many layers to relationship marketing,” Adam adds. “And a lot of it is contextual. Some customers might want a transactional relationship with one brand and a more personalised relationship with another. But all customers want acknowledgement and appreciation.”

In today’s competitive landscape, brands are finding it increasingly challenging to maintain loyalty and build strong relationships, Teresa says. Even more, many marketing teams are pushed to do more with the same resources. It’s the perfect storm, keeping their relationship marketing strategies stagnant and transactional.

“Many are still very transactional and predominantly focused on delivering business outcomes rather than providing real value to the customer,” Teresa points out. 

“Value exchange is so important. Yet it still feels like much of the activity that brands are driving to market is about what they want the customer to do and what outcomes they’re looking to achieve as opposed to truly understanding what it is that the customer wants. 

“You have to go out and talk to them. As brands, we’re still not very good at listening to our customers. It’s really hard to do relationship marketing when we don’t understand our customers intimately.”

A brand that is hitting it out of the park when it comes to relationship marketing, Teresa says, is Starbucks. “Starbucks invested early in understanding the customer and driving loyalty. It knows that in an ever-changing landscape, its customers want convenience and frictionless experiences. The experiences that Starbucks has developed deliver true value to its customers.”

The double-edged sword of privacy in a cookie-less world

The death of the third-party cookie is imminent. And for consumers, it won’t get here a moment too soon. According to Cheetah Digital’s report, a staggering 69% of consumers think product recommendations from cookie tracking or similar is creepy, not cool. And while only around one in 10 (13%) consumers will miss cookies and think they make for a better experience; the number of marketers who will miss them is likely a lot more. 

“I don’t think brands are ready for a cookie-less future,” Teresa insists. “We recently surveyed over 200 senior digital marketing leaders from brands, big and small, for our 2022 Marketing State of Play report. We found that only 12% of brands feel like they have a clear path forward, and almost half admitted they have yet to start planning for the change that’s coming.”

Despite all the buzz about third-party cookies, Teresa believes brands haven’t fully grasped what it truly means. And a significant part of the issue is data literacy. “Our report reveals that there are very low levels of data literacy within marketing teams in this country. Only one in three feel that their teams have strong data literacy,” she explains. “That’s part of what’s driving this. It’s very hard to know how to adapt when you don’t have strong data literacy or knowledge about concepts like cookies.”

At the other end of the spectrum, Teresa shares how brands are typically slow to adapt without a catalyst. Take COVID, for instance. Brands should’ve been working on their digital transformation long before March 2020. But it took this unprecedented event just to get them started. She says the same is likely to happen with cookies. Brands will scramble to change the day third-party cookies die. 

Their first line of defence will have to be a first-party data strategy in the form of a loyalty program. However, it’s vital that brands recognise that loyalty is only one piece of the puzzle. 

Loyalty programs are a great tool to get first-party data, preferences and all the things that help a brand understand its customers. But there’s still a long way for brands to go. They need to figure out how to go to market with their limited budgets, all the information we provide and with some tech behind it to make it happen.

The takeaway message for brands, the panellists concede, is to be brave. If you remain fearful, you’ll never evolve and innovate. It takes having the right champions in place who are willing to be bold enough to take the brand through a true digital transformation. To take their data renaissance to the next level. 

Access the webinar free and on-demand here.

This article is written by Miles Toolin, senior solutions consultant at Cheetah Digital.

Cheetah Digital is a cross-channel customer engagement solution provider for the modern marketer. The Cheetah Digital Customer Engagement Suite enables marketers to create personalised experiences, cross-channel messaging, and loyalty strategies to meet the changing demands of today’s consumer.

Categories
SME Featured East Asia

Consumer expectations amongst hurdles of Hong Kong SMEs in fully becoming sustainable

Hong Kong SAR – ESG and sustainability issues alike have been moving up the corporate agenda in recent years. According to Google Search Trend, the keyword ‘ESG’ search popularity in Hong Kong has been soaring and surpassed ‘Sustainability’ in May this year; however, public curiosity about the topic doesn’t seem to convert into actual practice, according to the territory-wide SME sustainability survey conducted by the Centre for Civil Society and Governance (CCSG) at The University of Hong Kong.

According to the findings, slightly over one-third (36.7%) of SMEs rated themselves as effective at advancing sustainability goals compared to only 4.4% of SMEs rated ineffective. Among the 24 practices across five dimensions, namely governance, workplace culture, customer-supplier relationships, resource management and innovation, the study reveals that the average number of sustainability practices adopted was 7.7 across all industries.

SMEs were quick to be honest that they are encountering several dilemmas in achieving sustainable practices. Amongst such challenges, economic and financial instability comes out on top (65.4%), followed by global health crisis (53.8%), and consumer expectations (22.9%), which suggest that SMEs are struggling to stay resilient and recover from the unstable economic environment. 

In contrast, long-term social-ecological risks such as climate change, human rights, and inequality only received 6.3%, 4.8%, and 3% of respondents identified them as a challenge. This might suggest that SMEs are less concerned about the potential risks induced by climate change, or not aware enough of social challenges such as inequalities in the workplace that could cause serious implications for their businesses in the long run.

Furthermore, the study found that the most needed support for integrating sustainability into the SMEs’ business operations, strategies and business models are namely financial support (47.7%), and marketing support (41.2%), whilst such support is ideally provided by the government (69%), followed by business associations, and banks and financial institutions, both receiving 30.8% of the response. This implies that the most effective way to encourage SMEs to integrate sustainability is to offer financial incentives.

Professor Wai-Fung Lam, director of CCSG, and professor of Politics and Public Administration at the University of Hong Kong, remarked, “The business sustainability agenda has been steadily gaining momentum. However, the spotlight remains on the role of multinational corporations and listed companies. As the engine of economic progress, SMEs have made diverse contributions to social and environmental well-being. Yet, their unique challenges and constraints have not been widely studied. This points to the need to understand the role and positioning of SMEs in creating the impulse to achieve widespread positive, social, environmental and economic change for a more sustainable future.” 

The Survey was based on the views of 1,400 SMEs in Hong Kong within the period of November 2021 to April 2022.