- There are two different types of consumer brand relationships: exchange relationships and communal relationships.
- If you want to maintain consumer brand loyalty, you must provide value to your customers.
- Brands must understand their consumers so they can provide them value in the way they expect it.
Consumers' relationships with brands are not all that different from relationships with people. Some you genuinely care about, while others are in your life simply because you depend on them.
For marketers, understanding the difference between the two kinds of relationships is essential to making sure you know how to deal with your own customers.
Marketers who realize this will be in a better position to retain customers and improve the perceptions of consumers who are unhappy with a brand's service or product, according to researchers who recently studied the phenomenon.
In one kind of consumer/brand relationship, people relate to the brand based primarily on economic factors. Walmart, for example, attracts customers based on price and value. In what the researchers call a "communal relationship," consumers relate to the brand based on caring, trust and partnership. State Farm, for example, sells itself as a "good neighbor."
What is a brand customer relationship?
The relationship between brand and customer is a unique one that can have positive outcomes for both parties. Customers develop relationships with brands and think of them as partners. Brands become more human to customers and obtain meaning and value. This type of relationship relies on quality. There are a number of factors that lend themselves to creating a quality relationship between brand and consumer, like the consumer's ability to identify the brand in the first place, and their willingness to trust and commit to it.
When a brand has built up trust in their customers, brand loyalty begins. If customers find a product they can believe in, then they will be loyal to brands. Companies have to make an effort to create these relationships with customers. That is only the first step. They must then work to maintain and grow the relationship. Customers want to feel fulfilled, either because the product fills a need or because they feel loyal to it. You might have both kinds of customers, and you must find ways to appeal to each type. Offer a product that meets your consumers' needs, but also ensure it's reliable and of the highest quality.
How consumers react to experiences with the brand, both positive and negative, depend on how they like the brand in the first place, researchers said.
Pankaj Aggarwal, a marketing professor at the Rotman School of Management at the University of Toronto Scarborough, and Richard Larrick of Duke University, tested brand evaluation after an unfair transaction in 2012. The results still apply today and depended heavily on whether the consumer was in an exchange relationship with the brand or a communal one.
In one study, Aggarwal and Larrick set up a situation in which the consumer didn't get what they paid for and wasn't remunerated for a mistake made by the brand. When customers were treated with respect and dignity after the mistake, those who had communal relationships with the brand responded well, possibly because it reassured consumers about the caring nature of their association with the brand.
In fact, concern from the brand acted as a form of compensation in itself. However, this effect wasn't found when consumers' relationships with the brand were based mostly on price and value.
In that case, if the consumers didn't think they got their proverbial money's worth, it didn't move them to reconsider their negative evaluation of the brand.
However, things change when there is no problem that needs to be addressed with the customer.
What is brand relationship management?
Brand relationship management is a concept that allows businesses to remain constantly engaged with consumers. It intends to create humanlike relationships between the brand and the consumer. This is a step away from keeping the relationship transactional only, and warrants a deeper focus on the actual connection between both parties.
Consumers are expecting and demanding more from brands today. If they do not see the value in an item, they will not pay a premium price for it. There is a stronger sense of competition among the brands as consumers have more flexibility in their purchases. As the market expands and options increase, consumers have become more unpredictable. Managing brand relationship is purely about the consumer. If a business wants to maintain the consumer-brand relationship, they must create and provide value.
Ironically, respectful and fair treatment by a company means more to those who choose a brand based on value than to those who have an emotional relationship with a company. The researchers think this might be because the brand has already met the expectations of those in an exchange relationship — the consumer got what they paid for.
Genuine and respectful treatment goes above and beyond. For those in communal relationships, who were already expecting to be treated positively, the same treatment doesn't have as much of an effect.
"Adverse outcomes happen sometimes. People are treated badly or a product fails," Aggarwal said. "Marketers must understand the type of relationship that they have with the consumer so they can figure out how to make good that unfair outcome."
The "right" response to correct a brand's transgression depends on the relationship the brand tries to build with consumers. For example, a sincere apology letter may work in a communal relationship, whereas a refund or discount would be advisable in an exchange relationship.
The study, "When consumers care about being treated fairly: The interaction of relationship norms and fairness norms," was originally published in 2012 issue of the Journal of Consumer Psychology.