Consumer expectations are up again. A lot. Why should that matter to marketers? Because “expectations” are a key determinant of customer loyalty, marketing success, and brand profitability. According to the most recent Brand Keys Consumer Expectations Survey, expectations for virtually every category have increased an average of 42% in the first six months of 2020. That’s on top of 2019’s average increase of 250%! The brand bottom line is expectations continue to grow. Consumers are unwilling to settle for what exists. And they aspire for what they envision à la their category ideal.
Expectations are mostly emotional and totally unconstrained by reality. Brand Keys estimates that of the 112 categories and 1,203 individual brands we tracked this year, the current, average ratio of emotional values to rational values that drive engagement, loyalty and sales is 75:25. That makes rational primacy-of-product positionings or low-lower-lowest price offers pretty ineffective responses to expectations growth.
Expectations are not category-compliant. They grow at the speed of the consumer and faster than brands can keep up. Because categories are, by their very nature, different, different categories have different expectations. On average – the category notwithstanding – an annual increase in consumer expectations of 25% might reasonably be expected. Brands, on the other hand, are generally only able to keep up by five to seven percent. That leaves an enormous gap between what consumers truly desire and what they see brands delivering.
Virtually all categories have seen significant increases in consumer expectations in 2020. Some more than others, some more evident than others, and some more connected to recent events than others. The categories with the largest increases included:
- Pharmaceutical Companies and Pharmacies (+61% each)
- Household Cleaning Products (+59%)
- Health & Hygiene Products (+57%)
- Self Defense (guns) and Personal Safety Products (+54% each)
- Video Games and Streaming Video (+50% each)
- Supermarkets (+49%)
- Video and Web Conferencing (+45%)
- Mail/Package Delivery Services (+44%)
Expectation growth is fuelled by of one of two events:
- Category innovation. Something new always increases consumer expectations – for the particular category a brand competes in and, eventually, in other categories as well, and
- Consumer experience. National and global incidents, and transformations within a marketplace.
Let’s consider #1. The actuality is that real innovation is both rare and erratic. According to our newest survey, consumer expectations we’re seeing now have been super-charged by #2; transformational events, including three, paradigm-shifting incidents in particular.
The first is the coronavirus pandemic. Consumer expectations related to “fear” head the list. Fear of illness, fear of unemployment, the fear, necessity, and newness of social-distancing, fear for friends and family, and secret and emotional expectations for a vaccine, with an ultimate return to normalcy.
The second event relates to the George Floyd killing. That has incited expectations related to equality, racism, and policing policies. It has instigated demonstrations, violence, and, indeed, expectations related to basic tenets of humanity. Consumers can’t ignore any of it. Expectation-expansion, like oil spills, sometimes trickles, but often bursts, into other categories, the marketplace generally, and brands specifically. Thus, none of it remains separate or insulated.
The third relates to delivery services. Surging e-commerce volume during the COVID-19 crisis, combined with staffing and product shortages, have strained delivery services. It has delayed deliveries. What was overnight, is now 3 days. Two-day delivery is a week. And just because e-commerce sites post a very rational banner warning, “Delivery times may be longer than normal,” in big red letters, it does nothing to mitigate what the consumer expects. If anything, it feeds them.
It is critical for marketers and researchers to identify and track real consumer expectations. They represent the emotional framework that structure the hopes and dreams and feelings consumers hold for the “ideal” in every category. Consumers use their ideal to compare offerings in a category and decide how to act. The brands that measure up, see success. The brands that don’t, generally fade away, and, ultimately, go away. A brand’s ability to meet or exceed expectations is a leading-indicator of positive consumer behavior.
Brands should not settle for 1-to-10 scale value assessments. They need real insights into what consumers really want, not what they say they want or rate what they want. Brands need to be able to measure real, emotionally-based expectations and they need to do it on a predictive basis. They need to identify the mostly-emotional trajectory a consumer and brand will follow in the marketplace. And then be there for them and before the competition.
Brands able to best meet the emotional expectations consumers hold for the loyalty drivers for their category ideal, are felt by consumers to better fulfill their needs and desires. Brands best able to do that always see better consumer behavior toward the brand. Correlations between meeting expectations and increased, positive consumer behavior fall into the 0.80 to 0.90 range, which are extraordinarily high. Almost as high as the consumer expectations themselves.
Ultimately, it’s axiomatic. Because brands best able to meet expectations for their category ideal instill better consumer behavior toward a brand, axiomatically, the brand should see more sales. More sales result in greater profits. Brands that best meet expectations always end up category leaders with more loyal customers and healthier balance sheets. Marketers shouldn’t settle for less.
It turns out that 21st century consumers don’t settle either. They don’t settle for easy, they don’t settle for average, they don’t settle for ordinary. They expect their ideal to be met. And marketers who ignore that truth, do so at their peril.
