BRAND & SHOPPER Connect MOMENTS OF TRUTH. The Relevance of Touchpoints along the Customer Journey. October 2017
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1 BRAND & SHOPPER Connect MOMENTS OF TRUTH The Relevance of Touchpoints along the Customer Journey October 2017
2 2
3 Contents 4 Moments of Truth: The Relevance of Touchpoints along the Customer Journey 6 Multiple form the brand 7 Brand experience also takes place at the Point of Sale 8 Long-term brand connection through TV Advertisements 8 Linking Offline and Online Touchpoints 9 Integrated communication achieves growth 10 Touchpoint Management has to be holistic 12 Contact 3
4 MOMENTS OF TRUTH The Relevance of Touchpoints along the Customer Journey The moment of truth happens at the supermarket shelf: Does the product get noticed? Does it attract attention? Does it get placed in the shopping cart? Actually, the decision for or against the product is not exclusively made in the supermarket. Experiencing the brands across a variety of contact points plays the determining role. This conclusion was drawn from two studies conducted by Kantar TNS, presented by Dr. Niels Neudecker, Nicola Niesl, and Caroline Schicketanz. For consumers, the choice of products is becoming increasingly complex in an excess supply of more or less interchangeable products, an increasing number of goods are competing for steadily declining space on the shelf. In the rivalry for buyers, brands outplay each other through especially noticeable placements, unique packaging, product innovations, limited editions, and irresistible special offers. Latest research shows that placement of the brand in the supermarket alone is not sufficient. Despite the intensified competition for attention at the point of sale (PoS), consumers often buy brands they already preferred. In over half of the buyer situations, the preferred brand is chosen. For coffee, this is 70 percent of cases (See Figure 1). In contrast to other categories, in fast-moving consumer goods the decision for or against a product is made in a significantly shorter period of time and with less cognitive effort. Those decisions usually involve frequently made repeated purchases. For this reason, the emotional values and trust in the brand play a crucial role. A long-term brand building agenda is of central importance to win in the moment of the buying decision for one s products. Thus, the supermarket shelf is not the only moment of truth. Instead, it is complimented by many other important moments throughout the entire customer journey. So, which are the concrete moments in which the perception of the brand is influenced and can, therefore, realize its growth potential? Brand building can happen at any moment a consumer comes across a brand. These moments, also called, are thereby the essential instrument of influence in brand management. It is critical that the actions taken by a firm reach the right consumers, how well between consumers and brands are remembered, and whether the brand has made a positive or negative impression at each touchpoint. 4
5 % purchase situations 26 coffee pain killer spirits hair care detergent cars Figure 1: Percentage of purchase situations in which preferred brand is purchased 5
6 Multiple form the brand The spectrum of different is extremely large: Every experience with a product forms the brand. Touchpoints can refer to typical TV advertisements or social media comments, but also to own product experiences. Touchpoint experiences are thereby developed along the entire product lifecycle: before, during, and after the purchase (see Figure 2). Because of the short purchasing cycles of consumer goods, after the purchase is often also before the next purchase. A Kantar TNS study of the German coffee market revealed the influence different have on the consumer s brand experience and which moments are key for brand building. The German coffee market is highly dynamic due to changing consumer habits. An increasing interest in coffee capsules, as well as espresso brands, is putting traditional filter coffee brands under pressure. The utilization of capsule machines leads to higher change barriers, since oftentimes only a specific brand s capsules can be used per machine. In addition, the increasing demand for Fair Trade coffee and the influence of discounters that also offer high-quality coffee brands also places strains on the market. The consumer goods discounter Aldi, for example, promises highest quality standards with coffee from its own roasting plant. before purchase during purchase after purchase TV ads Radio ads in Print ads PAID supermarket PAID Product test Shelf presence in Loyalty card OWNED supermarket OWNED Recommendations Social Mediaposts / Tests / reports EARNED by friends and family tweets EARNED Figure 2: Examples of paid, owned and earned along the consumer journey 6
7 Brand experience also takes place at the Point of Sale In order to examine the significance of the in such a dynamic market, the study analyzed 43 for their influence on brand experience among 13 coffee brands. The results of the study show the differing relevance of and aid in determining various recommendations for consumer good brands. It was found that, with 21 percent across all coffee brands, the point at the supermarket shelf accounted for the largest share of the brand experience (see Figure 3). Stands with products at the point of sale are another important touchpoint, which makes up ten percent of the brand experience. In total, the at the point of sale account for 37 percent of the entire brand experience. Even in the time of increasing digitalization and diversification of, the availability and clever placement of the own brand in the supermarket continues to be the top driver of long-term brand preference. However, this result also shows that a large proportion of the brand experience does not take place in the supermarket, but in other moments. Another imporant touchpoint of the coffee market is own brand experience. For coffee, the product experience can be more multilayered than with other consumer goods, since coffee is sometimes ground and brewed by the consumers themselves. Recommendations by friends and family, the so-called Earned Touchpoints, also play an overarching role because of coffee s high social components, as for example, when inviting friends for coffee. These two generate 23 percent of the brand experience (see Figure 3). Consumers who have already tested or bought a coffee brand become an important target group in touchpoint management. Their own brand experience can easily be enhanced though product experience. In addition, if they share thoughts with friends and family, they can also influence these people s brand experience. A strategy to strengthen these is to make the first own experience with a brand easier for potential new customers. For this purpose, the distribution of product samples and tasting in the supermarket or at events could be effective. 21% shelf presence in super market 15% own product experience 10% display at point of sale 8% recommendations of friends and family 13% TV ads 1% billboard ads 1% radio ads 37% 31% 25% Point of sale Earned Traditional media 7% Online Figure 3: Impact of on coffee brands in Germany 7
8 Long-term brand connection through TV Advertisements Among the traditional, TV advertisements make an especially significant contribution to the strengthening of brand preference among coffee brands. Across all analyzed coffee brands, an average of 13 percent of the brand experience was generated through TV advertisements. While Aldi s discount brand did not use TV advertisements, other brands could generate up to 30 percent of their brand experience this way. Radio and outdoor advertisements are, however, almost insignificant for the brand experience within this product category. The strength of these does not come from the long-term brand building. Instead, it primarily originates from the short-term selling activation. The results of the study are in line with the insights of Binet and Field, who analyzed the short and long-term effectiveness of brand investment across 996 campaigns. They emphasized that TV advertisements are an essential touchpoint in the building of an emotional and longliving brand connection. Yet, the researchers have also identified great potential in digital, which could compliment other methods to strengthen a connection with a brand. Linking Offline and Online Touchpoints By accounting for only 7 percent of the brand experience, online points of contact were found to still play a minor role. However, the impact of the digital should not be underestimated. This was shown in another study conducted by Kantar TNS that examined different brands of detergents. Overall, twelve soap brands were measured across 43. The result was that brands which remain only on traditional media are outshined by digital campaigns of their competition. The study made clear that one of the examined brands in particular could thrive through digital such as online customer recommendations, online coupons, online videos, and advertising banners, as compared to established brands. The explanation for this success is the marketing strategy of the brand, which focused its campaign on online coupons. Their coupons are downloaded by customers and can later be activated in the store. Through the connection of digital with shopping in the traditional offline stores, the brand managed to create a special kind of brand experience. 8
9 Integrated communication achieves growth From the example of the detergernts, it becomes apparent that the success of a campaign is rooted in integrated communication across offline and online. We can conclude that do not only have a direct effect on brand attitude but can also produce a strengthening effect with other. These synergetic effects of with each other have also been recorded in the study. When examining the effects of synergies in comparison to competition, clear differences become apparent: Across all 43, the integrated campaign of a brand generates significantly more synergy effects than competing brands without integrated campaigns. While there are some identifiable synergies for the competition across different offline, no integration of online and offline takes place (see Figure 4). In contrast, the brand with the integrated campaign manages to connect almost all with each other, which strengthens their respective influence on the brand. In the simulation of future market development, market growth could be projected for the brand with the integrated campaign, while the competitors can expect a slight decrease in market share. Detergent brand A with integrated campaign Detergent brand B without integrated campaign Other Digital Other Digital Figure 4: Touchpoint with vs. without integrated campaign 9
10 Touchpoint Management has to be holistic The results of these two case studies in the consumer goods market show that about a third of the brand experience occurs directly at the supermarket shelf. The clever placement at the PoS does have an influence on the preference for a brand and should not be neglected. From another angle, the findings signal that two-thirds of the brand experience do not take place in the supermarket. This emphasizes the significance of the brand in this category and the importance of holistic touchpoint management. In addition, it should be noted that integrated marketing and market growth are directly associated. It is, therefore, important to communicate the brand message as orchestrated and efficiently as possible. In order to achieve this objective, the crucial need to be identified and combined in a synergetic manner, so that a holistic brand experience emerges. This task is not an easy one, as the current studies show. Even well-established brands find it hard to meaningfully connect different points of contact, especially when the integration of online and offline is involved. Reasons for this difficulty could be that the traditional advertising and the digital campaigns are often planned independently from each another and thereby allow for little coordination. However, it is similarly problematic when traditional advertising is taken 1:1 to the digital channels, without regard for and taking advantage of the special properties of these channels. To allow for efficient and integrated marketing, the right structures must be created within an organization. The internal collaboration must be strengthened and the self-created categorical thinking of different departments must be overcome. Because of true importance is what gets through to the customer, in every single one of the various moments of truth. Experiences that really matter are those which make their way to the customers minds. 10
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12 Contact Kantar TNS Brand & Shopper Landsberger Straße Munich Germany Dr. Niels Neudecker Head of Global Connect Centre t e niels.neudecker@tnsglobal.com Nicola Niesl Senior Consultant Global Connect Centre t e nicola.niesl@tnsglobal.com Caroline Schicketanz Consultant Global Connect Centre t e caroline.schicketanz@tnsglobal.com BRAND & SHOPPER Connect Kantar TNS 2017
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