The following is a guest post from Robert Passikoff, founder and president of Brand Keys. Opinions are the author's own.
For marketers, consumer expectations are one of the most critical marketing components to address. Expectations represent the hopes and dreams consumers hold for their category "ideal."
Expectations manifest themselves in the category-specific, path-to-purchase loyalty drivers that describe the "ideal" for the particular sector in which a brand competes. They inform us how consumers really see a category, how they really feel about the category, and what they really expect. And yes, the loyalty drivers will be different for different categories, as are their expectations. Consumers don't, after all, buy cars the same way they buy a computer or a soda.
Expectations — because they are emotional and unconstrained by reality — grow faster than brands are able to keep up. Expectations for different categories will vary, but on average it is reasonable to anticipate an increase in consumer expectations by about 25% year-over-year. Brands, on the other hand, are able to keep up by only 5-7%, which presents an enormous gap between what consumers really desire and what they see brands delivering.
Opportunity for marketers
This presents an opportunity for marketers. Expectations are a key determinant of consumer behavior and thus, brand loyalty. Expectations represent the trajectory a consumer and brand will follow in the marketplace. Brands that are best able to meet expectations consumers hold for the loyalty drivers for the category ideal, are felt by consumers to better fulfill their needs and desires. Because brands best able to meet expectations for their category instill better consumer behavior toward a brand, axiomatically the brand should see more sales, and more sales generally result in greater profits. Brands that best meet expectations end up as category leaders.
Categories are, by their very nature, different. They are delineated. But no matter how different, they are not insulated when it comes to expectations. Expectations are like an oil spill. It doesn't stay in one spot, but spreads. Heavier in one area than another perhaps, but no place is ultimately left unaffected. The same is true about expectations consumers hold for brands.
To complicate matters, expectations — mostly associated with emotional category values — are not something easily identified or explained away. Even elite brands have a hard time keeping up with their category's average annual-expectation increase. This year is even more severe, where the top six increases were identified in the following categories (numbers in parentheses represent the overall increase in consumer expectations):
- Pharmaceutical companies and pharmacies (+61% each)
- Household cleaning products (+59%)
- Health and hygiene products (+57%)
- Self defense (guns) and personal safety products (+54% each)
Consumer expectations have increased on average 37% in the first six months of 2020, a new Brand Keys study found. Expectation growth is always the consequence of one of two alternatives; first is category innovation. Something that's new typical ramps up consumer expectations for the category specifically and tangentially as those expectations "spread." The second is the result of consumer experience. Most recently consumer expectations have been fanned by a number of paradigm-shifting events, but chiefly three incidences.
Coronavirus, current events impact expectations
The first is the coronavirus pandemic and consumer expectations associated with fear of the illness itself, the fear of unemployment, the necessity and newness of social distancing, qualms about friends and family, as well as exultant expectations for a vaccine and return to normalcy.
The second event relates to the killing of George Floyd, which has incited expectations related to equality, racism, police brutality, as well as instigating demonstrations and lateral violence. It's not something consumers can ignore, and none of it remains separate from the rest of the world. Expectation-expansion spills over into other categories.
The third relates to the U.S. Postal Service. Surging e-commerce volume during the COVID-19 crisis, combined with USPS staffing shortages, have strained the postal system's delivery services and delayed deliveries. What used to be overnight delivery now takes three days. Two-day delivery becomes a week. There was no reduction in consumer expectations just because e-commerce sites posted the quite rational banner, "Delivery times may be longer than normal," in big red letters. Not being able to get something in the time you expect emotionally fuels expectations. Yes, rationally consumers understand the new world they live in, but... That "but" is the sound expectations make as they get ready to expand. Brand Keys tracks over 1,000 brands in 100 categories, and all but two (cola and diet-cola) have seen significant expectation increases since January. Some more than others, some more evident than others, and some more connected to recent events than others, but 98% have elevated. Higher expectations showed up everywhere, but below are other categories that showed significantly higher consumer expectations:
- Video games and streaming video (+50% each)
- Supermarkets (+49%)
- Video and web conferencing (+45%)
- Mail/package delivery services (+44%)
- Online/mobile food ordering (+42%)
- Exercise equipment (+39%)
It was Alexander Pope who wrote, "Blessed is he who expects nothing, for he shall never be disappointed," which may be true, but he never had to deal with 21st-Century consumers. They expect everything, and marketers who ignore that fact do so at their own peril.