Relationship-Centric Marketing and the Need for Understanding Consumer Psychology

By Julia Shisgal, MRIA Emerging Leaders Blog, March 2017

The majority of research on self-esteem and relationships has focused on close relationships such as those within a household, a larger family unit, in friendship, or between romantic partners. However, now more than ever, there’s a need for researchers and marketers to focus on the relationships between brands and their customers. Why? As the prevalence of technology is increasing and the world is becoming more hyper-connected, we’ve seen significant changes in consumers’ expectations and purchase behaviour. Companies that want to keep pace with these consumption changes should consider looking beyond traditional market research methods (i.e. asking questions in a survey or focus group discussion) and move toward studying consumer psychology via neuroscience methods (such as brain scanning, emotion measurement, and implicit measures).

Technological Impacts on the Consumer Landscape

Today’s online businesses and digital marketers are changing the way brands are engaging and interacting with their customers. As technological innovation is increasing its reach via globalization, it is also paving the way for a new economy, “where technology and open global markets conspire to create more risks and opportunities; [one that] is customer-driven and not simply customer-centric” (Tarbet, 2015).

What does this mean for brands? It means shifting away from product-driven approaches where the focus is on maximizing profits while being passive to customer service, and away from customer-centric environments (i.e. where companies’ efforts are based on their own idea of the customer) (Tarbet, 2015). In the emerging economy, the ideal method of engagement is one that is relationship-centric and is based on collaboration, focusing on “not pushing but pulling information from the marketplace. It’s about maximizing lifetime value versus pushing single interactions…it’s about predicting what is going to happen next” (Tarbet, 2015). This allows customers not only to choose how and when to engage with brands, but also provides a more interactive and proactive service model for a deeper understanding of customers as humans with needs, rather than market segments.

Furthermore, technology is also helping to shape the changes we see in consumers’ shopping tastes and expectations, most notably in the retail industry. Barbara Thau (2015) has noted consumer trends have been shifting towards “instant gratification, one-of-a-kind merchandise, and [consumers] are cozying up to the idea of borrowing goods versus buying them”. For example, companies such as Amazon and Uber have not only changed the way people think about service, but also how they go about their daily lives – people are no longer willing to wait for taxis, and they want as much information as soon as possible (Thau, 2015). Based on current trends, branding and consumer experts predict that future retail models will focus on selling experiences over products, which again reiterate the urgent need for a better understanding of consumer psychology (Lindstorm, n.d; Thau, 2015).

Psychological Variables to Consider

There are few companies that truly understand why their customers choose to have a relationship with them. Most companies understand what, where, and when their customers purchase, and in recent years we’ve seen an ever-increasing demand for business technologies (e.g. CRM, and loyalty program software) that provide such data (Sisodraker, 2017). However, does having more customer data translate into having better relationships with them? As mentioned in Sisodraker’s recent article (2017), “The value of relationships with friends and family isn’t based on the amount of money they spend when they are with you. It’s not even based on the number of interactions you have with them.” As with personal relationships, we can clearly see that brand relationships are based on something much deeper than companies assume in their quest for adopting business technologies or more data to strengthen their customer relationships (Sisodraker, 2017). According to psychological literature, the most critical variables to understanding brand-customer relationships are consumers’ fit between brand personality and their self-concept, self-esteem, and brand attachments.

Self-Congruence Theory and Brand Loyalty

Empirical evidence has shown that when there’s a match between a brand personality and a consumer’s sense of self, this is likely to form an emotional attachment with that brand. Moreover, “the stronger the connection, the more likely the consumer is to go to greater measures to continue the relationship and promote the brand to others”. This extends into expending one’s own resources, and willingness to engage in difficult behaviour in order to maintain that brand allegiance (Rohrbach, 2015).

In the research on emotional brand attachments, the most prevalent focus is on the congruity (or fit) between consumers’ self-concept and brand personality (Rohrbach, 2015; Kim, Lee, and Ulgado, 2005). Brand personality emerges when consumers associate human characteristics in their perceptions of a brand. According to self-congruence theory, the “self” can be broken down into two: the “actual” self, grounded in a person’s realistic view of who they are, and the “ideal” self or the person’s concept of who they aspire to be. The literature posits that when consumers find a match between a brand personality and their sense of self (actual versus ideal self), they develop a stronger attachment with that brand and will purchase it more (Rohrbach, 2015).

Self-Esteem and Brand-Fit

A literature review by Mateo (2013) revealed two types of brands: horizontal and vertical brands. In horizontal brands, “users represent a subgroup within the reference group,” where customers can distinguish themselves from the average group member, whilst maintaining their loyalty to the overall group. Contrastingly, in vertical brands, “differentiation occurs when people use brands to demonstrate a degree of superiority over others in the reference group”– often luxury brands (Mateo, 2013).

Consumers use branded goods for different reasons. Some use brands to demonstrate their need to belong to a group, whilst others use brands to differentiate themselves or stand out. When those with low self-esteem feel socially excluded, they tend to exhibit deep brand attachments to horizontal brands: “by perceiving the group as made up of heterogeneous subgroups” they can protect themselves against sensed exclusions (Mateo, 2013). However, when these people feel included in the group, they usually opt for vertical brands that allow them to raise their profile while continuing to belong. A critical take-away from the latter case is that even in cases where people adopted brands that differentiated themselves, they were actually trying to fit in, rather than stand out (Mateo, 2013).

Putting it all together

In the shift away from product-and customer-centric environments and toward relationship-centric solutions, we need to consider how customers actually want to interact with organizations (as opposed to how organizations think they should interact with customers) (Tarbet, 2015). For example, in customer communications, there are segments managed by different people (in e-commerce, customer support, etc.). The vision behind relationship-centricity involves organizations that, instead of segmenting the customer experience, can integrate the interaction channels into a single “customer experience” point. In bridging the customer interactions together, it would become possible to not only understand what the customer wants to do at their current stage, but how the company should respond, and to whom (Tarbet, 2015).

While experts forecast the rise of selling experiences over products in the next decade, research on brand-customer relationships is likely to portend the next trend in marketing. Additionally, consumer psychology concludes that emotional brand connections cannot develop without a consumer’s self-concept (Rohrbach, 2015). Since consumers’ self-perceptions are a critical component of which products they use and what brands they interact with, we need to better understand how to implement these self-construals within marketing research, insights, and strategies, and innovate with consumer psychology.

Julia Shisgal is passionate about research and psychology and has been working in the market research industry for over a decade. She’s part of the Client Success team at Quantability, a firm specializing in bridging the gap between psychology, neuroscience, and market research.

References

Cheng, J. (2011, August 17). Consumer Fanboys Confuse Brand Identity With Their Own. Ars    Technica. Retrieved from https://www.wired.com/2011/08/consumer-self-image/

Hae Ryong Kim, Moonkyu Lee, and Francis M. Ulgado (2005) ,”Brand Personality, Self-Congruity and the             Consumer-Brand Relationship”, in AP – Asia Pacific Advances in Consumer Research Volume 6,             eds. Yong-Uon Ha and Youjae Yi, Duluth, MN : Association for Consumer Research, Pages: 111-117.

Lindstorm, M. (n.d.). Predicting the future… Retrieved February 16, 2017, from            https://www.martinlindstrom.com/predictions/

Mateo, P. (2013, September 3). Self-Esteem a Central Factor in Consumers’ Brand Allegiance. Retrieved             March 10, 2017, from http://www.atelier.net/en/trends/articles/self-esteem-central-factor-  consumers-brand-allegiance_423657

Relationships. (n.d.). Retrieved March 10, 2017, from             https://www.psychologytoday.com/basics/relationships

Rohrbach, E. (2015). 1 The Effect of Self – Construal on the Relationship Between Self – Congruence and             Brand Attachment. GCS Literature Review, 1-13. Retrieved from             https://www.commerce.virginia.edu/sites/default/…/GCSLiteratureReviewExample.pdf

Sisodraker, D. (2017, February 22). What does customer relationship *really* mean to you? Retrieved             March 6, from https://www.visioncritical.com/define-customer-relationships/

Tarbet , M. (2015, July 30). Digital Economy Is Not Just Customer-Centric; It’s Customer-Driven.             Retrieved February 3, 2017, from https://www.unboundid.com/blog/digital-economy-is-not-         just-customer-centric-its-customer-driven

Thau , B. (2015, February 10). A Look At The Retail Model Of The Future. Forbes. Retrieved from             https://www.forbes.com/sites/barbarathau/2015/02/10/a-look-at-the-retail-model-of-the-            future/#26c50a0d6550