The Weekend Mumbo: Has a trust crisis thrust marketing into turmoil?
Welcome to The Weekend Mumbo.
Here we go again. Another trust crisis. We’ve heard this one before.
A more obvious topic for today would have been something to do with Seven. And we have you covered on that front down the bottom with our coverage throughout the week, by the way. But I thought we would take a different path for the main discussion.
‘Trust crisis’. Not my line, by the way. I borrowed that from a press release and research report (The Unspoken Customer) that landed on my desk on Thursday morning from Customology.
It wasn’t the headline that grabbed my attention (that was rather mediocre in my humble opinion) but a sentence in bold in the body copy that read, “The report reveals the trust crisis between brands and their consumers, as customers share their objections to overzealous customer communications and irrelevant marketing materials.”
I find that statement to be fascinating considering the situation we find ourselves in at the moment. An environment where it is far more efficient, particularly on the cost front, to retain current customers rather than go looking for new ones, even though we know they are out there.
It’s fascinating because retaining a customer requires the development of a good relationship with them. In other words, a relationship that the customer finds relevant to their lives. A relationship with trust in it.
While we talk about brand love arguably too often, I don’t think anyone in this industry would argue that it’s commonplace for brands to truly believe the majority of their consumers have true brand love. Perhaps Patagonia’s team is reading this and shaking their heads. An outlier of course.
The Unspoken Customer report data
There are a few significant challenges to building these relationships. Firstly, as The Unspoken Customer reports, trust is diminishing. It’s at crisis level apparently. Consumers don’t want to hear more from brands whether they are currently with them or not.
Secondly, consumers are generally in a situation right now where they are looking for the best deal, whether that be a home loan, groceries, clothing, etcetera. We’re in a market which is becoming more and more price driven for the vast majority of people.
According to the PWC Global Consumer Insights Pulse Survey, “Half of consumers are extremely or very concerned about their personal financial situation (50%), with one-fifth extremely concerned (22%).”
This means that 96% of them are looking to adopt cost-saving measures in the next six months. They’ll shop around, in other words. The survey was released in February so that ‘next six months’ is right now. And with the cost of living not looking likely to get any easier in the near future, it is likely to be drawn out longer than six months.
PWC data
Where does this leave marketers?
The Global Customer Engagement Review by Braze agreed with The Unspoken Customer in suggesting it was far better for marketers at the moment to focus on retention rather than gaining new customers.
According to the former, “The macroeconomic volatility of the last three years continues to drive heightened caution in consumer spending, with people expecting more from the companies they do purchase from. With acquisition costs at these unsustainable highs, keeping existing customers happy is the key to both short-term success and long-term growth more than ever before.”
The challenge that this presents is that, while it is more cost efficient for marketers to retain customers rather than find new ones, consumers in general are being flooded with messaging, trust brands less, and are now on the lookout for better deals.
The Unspoken Customer report goes so far as to say, “Trust and loyalty are closely linked and mutually reinforcing. You can’t be loyal to a brand you don’t trust. Not surprisingly given the trust crisis, our research also showed brands were highly vulnerable to losing customers to their competitors, leading brands to focus their attention on acquisition.”
“In the rush to acquire new customers, brands often offer better deals than those available to their current customers and hope they won’t notice.”
One in one out? At the moment, PWC’s research would indicate that this strategy will annoy current customers but will work in gaining new ones.
A personal example. Let’s take the popular topic of home loans. I am refinancing at the moment. My bank is offering new customers better deals. It refuses to give me a better deal at the moment but says it will look at it in a few months. I’ll change banks, and take one of the many refinancing cash back offers. Simple. Bye bye, AMP.
Braze data
Back to The Global Customer Engagement Review. It’s no surprise that 36% of marketers ranked collecting, integrating, managing, and accessing data as their top challenge associated with customer engagement (the most-cited challenge among those surveyed), especially considering that the amount of global data produced is estimated to increase to 181 ZB by 2025.”
Put simply, marketers still seem to have too much data and not enough time to figure out what to do with it. Which makes over estimating consumer sentiment for your brand far more prevalent. As one marketer told me this week, almost every marketer thinks they are doing a better job than they are at keeping customers happy, and the majority of them are in some way delusional. That may go some way to explaining those great new customer deals, hoping the current customer won’t notice.
This leaves the industry at a point where it is facing challenges it has seen before (a depressed economy) but with rapidly evolving technologies it is not completely on top of and a new volatile consumer that has a very different mindset which arguably doesn’t lineup with obvious marketing strategies.
Put simply, consumers are looking for the best deal and willing to change. So it should be easier to find new customers with great deals. But at the same time, it’s cheaper to retain customers than find new ones, and the current set of customers are at serious risk – currently looking for the best deal and willing to change. Cheaper to retain, sure, but likely harder to convince than a new customer. What a cycle!
So what do you do? It very much feels like square peg, round hole territory.
The restructure was led by Kate Young, head of customer centricity and capability, who told Mumbrella that, “Marketing’s role in this structure and thinking about dedicated brand teams really enables more of a dedicated focus around solutions that will help customers make the most of what they do have in these times and be able to achieve a better level of financial wellbeing.”
She added that, “… as we’ve moved forward, we’ve recognised the need to bring functions together for things like best practice sharing or being able to operate more efficiently and effectively by reducing siloed ways of working and reducing duplication in work.”
Explaining the ANZ restructure further, Young added, “All of a sudden, marketing is starting to look and feel really different, so we recognised that and when we think about how we upskill and reskill our people at ANZ, it can’t just be about traditional learning and development programs.”
I would challenge the idea of marketing starting to look and feel really different “all of a sudden” – it’s been evolving rapidly ever since the digital economy truly emerged. But regardless, kudos to ANZ for looking to do something about it in terms of structuring its marketing team to better communicate with the ever evolving consumer across rapidly changing marketing opportunities.
The timing couldn’t be more perfect for ANZ, although I imagine that is a little bit of a coincidence as well, as marketing restructures of this magnitude, particularly at a brand the size of ANZ, are likely to have had to be in the works for quite some time prior to the announcement.
I wonder how many other brands out there are considering restructuring their marketing team even slightly? That’s a genuine question, and perhaps one that many brands need to consider.
The rest of the week
Perhaps this Weekend Mumbo could have focused on breakfast TV with the big news that David Koch would end his 21-year stint on Sunrise shortly. It’s always interested me how breakfast TV personalities gain such a high profile despite the ratings not being massive.
But credit where it’s due, lasting 21 years on the same show having to wake up at such a horrid hour – that’s worth kudos. Koch took some time to speak to Mumbrella’s Lauren McNamara on the Mumbrellacast which you can listen to here.
The Weekend Mumbo could also have focused squarely on Ben Roberts-Smith – a story that took another (somewhat predictable) turn on Friday when he resigned from his post of general manager of Seven Queensland.
There are significant ramifications from the result of the court case but in general, investigative journalism lives to fight another day.
And it’s been another week on the senior exec merry-go-round. Editor Shannon Molloy revealed that Leo Burnett’s Emma Montgomery is heading back to the US to a plum role in Chicago, Sue Squillace has taken an interesting role at Mediahub, which is kind of, but not quite, with the same business she was with previously, and Imagination’s Heath Campanaro has pulled up stumps after a long tenure.
And Seven has allegedly hired a new general manager. Although the source of that news is dubious!
Signing off
There has been some big movement on the Mumbrella event front. Former Westpac and ANZ CEO, now 2Be chairman, Brian Hartzer, will speak at the Mumbrella Finance Marketing Summit. It’s rare he makes media appearances so make sure you don’t miss that.
And the full program for Mumbrella360 is now available. It’s packed full of big speakers including 10 international executives and 17 coming from outside of NSW.
Time to let you go and enjoy your weekend.
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Feature photo by Chris Yang on Unsplash.
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