“A customer is not dependent on us. We are dependent on him/her. He/She is not an outsider in our business. He/She is part of it.” There is no doubt that the digital revolution has changed consumer behaviour. The exchange between consumers and marketers has become highly dynamic, interactive, and participative. Discuss.
Customers as argued by Pini (2009) are the most important in any business entity. Customers form the resource upon which the business can be defined as successful or a failure. The primary focus in customer management is to create repeat customers as this creates certainty of revue for the business. In doing this, customer participation forms the backbone of all the practises that have been adopted under customer relations management (CRM) (Goldenberg, 2009). The baseline for the products a business is producing is demand, and improves on the product, requires understanding demand and this, led to the adoption of CRM, and made products that the customer wants.
Customer participation today is used for provide data not only to better the business products, but to improve on customer participation all together. Customers are involved in the entire production-sales process with the major input being data (Brodie, Hollebeek, Ilic & Juric, 2011). This data is information that is provided by the customer on various processes, products, and activities in the business and it is collected through a number of strategies including call centers, social media, feedback, and suggestions. This essay therefore seeks to determine the importance of customer participation in branding, how it is done, and how the digital age has affected businesses, mainly through the benefits customer participation has for businesses. This will be done through reference to available literature material.
- Customer participation
Among the various literature accessed, customer participation can be defined as the specific behaviour, involvement, the degree of effort a customer has mentally and physically in relation to the production and delivery of a product (Brodie et al., 2011; Pini, 2009). Korzeniowski (2015) further elaborated customer participation definition by stating that in the context of marketing construct, participation is the types and levels of behaviour that customers engage in connection with the delivery and the define of what they seek. The factors determining participation include empathy, tangibility, meaningful interaction, and attendance of for example, meetings.
Business owners/managers have adopted various strategies in promoting customer participation. The strategy used is dependent on the type of industry. There are various types of customer participation among them being call centers, customer tracking, maintenance of customer profiles, feedback collection, in-product messaging, social media platforms for example Facebook, Instagram, and Twitter among other. The choices for customer participation are broader and more specific to individual customers with the digital era (Hollebeek, 2011). For example, blogging helps brand managers to update customers on new products and get customer responses through comments.
- Customer involvement in brand experience
Involvement of customers in branding is a process that according to Hollebeek (2011) begins with mangers trusting their customers. Customer participation is about collection of their feedback and suggestion and using these in brand management, for this to happen it requires trusting that customers are liable and understand the intricacies of the business enough as to provide viable suggestions. According to Balaram and Adhikari (2010), some companies consider the process of engaging customers daunting, but for this, the solution is to start simple and ramp up engagement systems and processes with time.
According to Klie (2013) and Ulusua (2011), customer engagement in branding should become a core part of the company’s brand management strategy. Branding is one of the key factors of competition in a competitive market, and to effectively manage competition, it requires the brand resonates with customer wants. Making customer involvement in branding serves to ensure that the brand is always in touch with the customers and customers can identify and own it (Ulusua, 2011; Mullin, 2006). Companies use varying customer involvement strategies for example, Southwest Airlines uses frequent flyers in their recruitment process of their flight attendants. Easyjet on the other hand significantly changed its business model, offering a selection of reserved paid seats a sight from the previous first-come first-served model, as a direct response to feedback from their customers.
According to Ulusua (2011), to ensure to encourage brand value and trust through involvement of customers in the branding process requires customers be made to feel that they are volunteering their suggestions and feedback. It is important that customer participation be not forced or done with heavy-handedness. Additionally, Mullin (2006) states that it is important that customers be kept informed on how their ideas were used or are being used in brand management. The reason for this is to make customers feel that their efforts were not in vain and it encourages them to prepare and participation in the next engagement or at any time for companies with ongoing customer participation strategies.
Customer participation in the brand process is mainly through word-of-mouth (WOM). Even though some (Mullin, 2006) argue that WOM is inclined more to marketing than branding, it is true and as argued by Flynn, Goldsmith & Korzenny (2011) and Klie (2013) branding is part of marketing and therefore, WOM is rightly placed under branding and as part of customer participation. WOM is one of the highly significant customer participation strategies were the customer gets to promote the brand. While WOM is about talking about the company to others, participation is about talking to the company. WOM can be either positive or negative and as stated by Mullin (2006), is has been shown through research to have direct impact on sales. Positive WOM is what organizations seek and this requires satisfaction of current customers who then spread the word on the organization’s products and this increases loyalty and purchase activity, as well as attraction of new customers.
Branding in the service industry is vital as the customer has an effect on customer participation (Balaram & Adhikari, 2010). Research has shown that culture has a direct relationship on customer participation and its effect is through the constructs of the risk perceived and control locus (Pini, 2009). Customer participation in the service industry is considered important because of the risky level and difficult in determining the outcome, participation therefore is considered a measure towards reducing the magnitude of advance ramifications and increases the probability of positive results. To improve customer participation in the service industry, Pini (2009) suggests organizational socialization of customers as it creates a positive affection between the customers and the organization.
- Customer and branding in digital age
Since late 19th century, technology has fundamentally impacted how brand manager develop their relationships with customers and it has also been a driving force in new ability for customers to participate in brand management (Woisetschla¨ger, Hartleb and Blut, 2008). Customer participation in branding is all about communication and has argued by Thompson and Sinha (2008) business communication has gone full circle from the agricultural age where an exchange involved one-to-one in barter trade, to the industrial revolution where an exchange was one-to-many, to the information age where targeting in marketing allowed for one-to-many segmentation, and currently the age of communication where there is two-way interaction. As a result of the interaction, there is not building of communities.
Digital age is mainly characterised by the internet and even through it is acknowledged that the internet is changing how individuals and businesses conduct business, it is also acknowledged that even though the internet is a distribution channel, a vehicle for advertising, a retailing model, it is also a completely new business model. The internet in branding provides a whole new branding model with its own opportunities and challenges (Woisetschla¨ger et al., 2008). The primary factor driving online branding model according to Woisetschla¨ger et al. (2008) is the need to capitalize on the numerous capabilities of multimedia networks that provide a communication environment of “many to many”. With the internet opportunities available, it is now possible to allow a customer from wherever to participate in the branding process, from design to establishment, and communication.
One of the key elements of the internet with relation to branding is the development of Online Branding Communities (OBCs). According to Thompson and Sinha (2008), the first branding communities came up as a result of high levels of customer-brand involvement. In the last decade or so, there has been a proliferation of OBCs which operate on global scale and are a result of the high adoption of advances in the internet, mobile phone technologies, and social media. In the last five years, Korzeniowski (2015) argues that OBCs have been driven mainly by social media which includes platforms like Facebook, Twitter, Instagram, and PinInterest and Mobile phone technology which is mainly responsive websites and mobile Apps.
OBCs have been found to strengthen the relationship with the brand, promoting brand commitment, and research has shown that members of an OBC have stronger association with the brand than non-participators, all which benefit the brand (Hollebeek, 2011). This has been argued to be as a result of growing emotional connection with the brand which develops through continuous engagement through comments, posts, suggestions, feedback, getting periodic updates on the brand which then results to emotional and social attachment with the brand.
- Benefits of customer involvement
Customer participation is one of the strategies that a business uses to enhance organizational relationship with its target customers, both existing and potential new ones. Will customer participation is meant for customers, it is not limited to customers as anyone interested in the market including employees, users of competing brands, and market experts are open to participate, especially in the OBCs (Manchanda et al., 2012). There are four main ways through which customer participation benefits businesses.
One, customer participation strategies mainly involve free exchange of opinions and experiences with branded products and therefore, such strategies are vital sources of consumer data that aids the organization in its market research efforts (Woisetschla¨ger et al., 2008). Depending on the type of customer involvement used by a company, e.g. online communities, it provides access to the voice of the loyal brand customers. Through interactive customer engagement, communication between the organization and its customers is enhanced and this provides an opportunity to see the strengths and weaknesses of established and new products (Woisetschla¨ger et al., 2008). Customer involvement therefore helps organization to gain knowledge on consumer needs, the desirable features of new products, and the trends for new products in the future.
The second benefit of customer participation is the cultural change that customers can cause, as to change from an unfavourable culture to a one that promotes integration, flexibility, and involvement (Brodie et al., 2011). This is best experienced through the various digital platforms of customer participation because in the traditional customer participation types, the culture in pace determines customer involvement. Customer participation has the potential to stimulate communication between the various departments involved in product branding and generate vital insights that aid in extending marketing efforts.
Third, customer participation helps in strengthening customer relationships with the brand and improves brand commitment (Mullin, 2006). Customers involved in the various customer participation strategies have more intensive engagement with the brand; have higher brand satisfaction, loyalty, trust, commitment, and advocacy all of which serves to heighten brand equity.
Lastly, customer participation has been shown through research to be an effective tool for increasing sales (Thompson and Sinha, 2008). Customer’s participation has a direct positive effect on the immediate intention to make a purchase and it is also an effective tool in the retention of both experiences and novice customers. According to Ulusua (2011), increased brand equity can improve brand performance through indirect ways as such brands with high brand equity have been shown to command higher price premiums, being more effective in their communication, and they enjoy higher trade cooperation and support, among other things.
Customer participation today is used to provide data not only to better the business products, but to improve on customer participation all together. There are various types of customer participation among them being call centers, feedback collection, in-product messaging, and social media. Customer participation in the brand process is mainly through word-of-mouth (WOM). Technology has fundamentally impacted how brand manager develop their relationships with customers. One of the key elements of the internet with relation to branding is the development of Online Branding Communities (OBCs). Customer participation is one of the strategies that a business uses to enhance organizational relationship with its target customers, both existing and potential new ones. Customer participation strategies mainly involve free exchange of opinions and experiences hence source of consumer data that aids the organization in its market research efforts. Customer participation can cause cultural change within an organization. Customer participation helps in strengthening customer relationships with the brand and improves brand commitment and lastly, customer participation has been shown through research to be an effective tool for increasing sales.
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