Would you have a long-term relationship with someone who didn't take the time to get to know you, or who talked endlessly about things you weren't the least bit interested in? No. So why do companies expect to have long-term relationships with their customers when they behave like this?
Most companies say they do not target their communications to their customers, according to the Chief Marketing Officer Council - perhaps because most of them do not even have their customer data all in one place.
The result, according to direct marketing agency Targetbase Claydon Heeley, is that 77% of customers feel brands are failing to engage with them, and even with the explosive growth in social media, only 13% of users share brand information monthly.
The problem is that although marketers have a great track record in adopting new technologies and communications channels, they are not always used in a way that builds deeper customer relationships.
Perhaps the first example was customer relationship management (CRM). This was overtaken by technology firms selling complex software that forced brands to focus more on how to implement the technology than how to use it to build customer relationships, which is why 50% of CRM programmes failed to deliver a return, according to IT research company Gartner.
Email was hailed as the next great new technology, but instead of focusing on the potential offered by a direct, one-to-one, and measurable channel, brands merely used its cheapness to send mass one-size-fits-all broadcasts. Two-thirds of consumers now find less than 10% of emails relevant or interesting, according to the Direct Marketing Association's Digital Tracker.
Yet the challenge facing marketers will continue to grow, as every advance in technology not only gives brands great opportunities to engage their customers, but also places more power in the consumers' hands.
The world of instant price comparisons, the single click to opt out of communications and the collective power of social media will influence brand behaviour like never before.
So over the next decade a real digital divide will emerge between brands. Those that continue to broadcast one way out to the people, promoting themselves and trying to pull customers to the brand; and the second, which will be truly customer-centric and use technology to develop two-way long-term relationships that deliver value to both the customer and the brand. At the heart of this relationship will be an emotional engagement, where the customer feels the brand shares their values, listens to what they have to say, and provides relevant content and value for money.
Increasingly the first group of companies will have to focus more on price, promotions and offers to hold the attention of their customers. The second group will enjoy higher levels of loyalty, with less price-sensitive customers.
Why is this? Our own research with Ipsos MORI tested the power of an emotional connection between a brand and its customers. A customer with an emotional connection (that is, felt good about the brand) was three times as loyal; three times as likely to recommend the brand to others and far less likely to shop around; with one-third of them requiring at least a 20% price discount to switch brands.
This strategy delivers tangible value. Analysis by McGraw Hill has proven that brands that invest in their customer relationships will grow 275% quicker than those who do not. Indeed, one can already see in some corporate results those brands focusing solely on price promises and value are suffering, while those that engage customers and focus on value are outperforming their peers.
Over the next decade, therefore, successful brands will be those that really put the customer at the heart of their marketing activity, and invest in building long-term valuable relationships with them.
Richard Dixon is director of customer optimisation at Black Sun