John Auckland, TribeFirst
The consumer is dead, long live the post-consumer. John Auckland, founder of TribeFirst, shares five tips for creating brand evangelists.
Let me be radical. I believe that people will soon be insulted if you refer to them as consumers. Consumerism is being replaced and a new movement of ‘post-consumers’ requires a deeper relationship between individuals and brands.
Younger Millennials and Generation Z are driving this change; making eco-friendly buying decisions, demanding to know the provenance of their clothes and food. Objecting to unsustainable practices such as planned obsolescence they will be sustainers rather than consumers and act as stakeholders rather than customers, tribes rather than crowds.
What do companies need to change in the way they communicate? And how can they create long-term relationships in this brave new post-consumerist world?
Create a community brand
First and foremost, the brands of the future will be communities, and to be even more specific, tribes. Two of my favourite community-focused brands are Monzo and GiffGaff, who involve their customers in major decisions, building democratisation into their marketing strategy.
For example, GiffGaff customers have written, directed and appeared in its TV ads. GiffGaff also provides rewards for providing customer service support. In doing so, it has essentially crowdsourced the business model, building one of the UK’s major mobile companies with only a handful of true employees. Their CMO, has described her role as a ‘brand custodian’ as opposed to a ‘brand guardian’. Essentially, she’s saying the company doesn’t own its own brand, it’s just looking after it.
Monzo, the challenger bank, has taken this a step further. For example, by opening up crowdfunding rounds specifically for customers, so they can become part owners in the brand. They’ve democratised decision-making by involving their community in major decisions such as changing their name and choosing what parts of their service they should charge fees on.
Brands like this are leading the way, but I predict this will become the new normal following the death of the consumer.
Turn customers into investors
One in 10 of us has invested in small UK private companies through equity crowdfunding, and this number is growing. It’s also becoming more common for growth companies and medium enterprises to offer shares to their customers. Big tech companies are riding high on the stock exchange, offering their shares via public exchanges far sooner than many historical corporations could ever dream of. Challenger stockbrokers such as Freetrade are being supported by retailer investor insight platforms like Genuine Impact. This allows DIY investors to make informed and instant decisions about the investments they make. It’s easier than ever for customers to own a slice of their favourite brands, so they can be financially rewarded for their faith and loyalty.
If you’re a startup or growth company, the best way to encourage your customers to invest is through an equity crowdfunding campaign. If you don’t know where to start there are a host of crowdfunding support partners and workshop programmes to help you with the process and increase your chances of success. Check out Virgin StartUp’s Crowdboost, Crowdcube and Grant Thornton’s Crowdfund Bootcamp or TribeFirst, where we offer a managed service to help companies raise.
If you’d rather just sell shares directly to your customers rather than run a public campaign, then you can either facilitate this through SeedLegals, or we recommend setting up your own fully licenced, FSA-compliant platform on Envestry.
Be ‘always on for investment’
Obviously, as a crowdfunding expert, I am a huge proponent of equity crowdfunding. However, I do find it quite limiting for companies that wish to be always-open to investment from their customers. You could list your company on a small cap public exchange like AIM or NEX Exchange, but that means a lot of additional cost and admin that comes from being a public company. BrewDog solved this problem by running multiple concurrent campaigns across rewards and equity platforms; they built crowdfunding into their DNA. But that’s a lot of effort.
However, there is an easier way to allow your customers to invest at any stage. One of the reasons I’m a big fan of Envestry’s white label solution is that it allows a company to be ‘always on’ for investment, 365 days a year. No time limited campaigns, just an ability for any brand to be available for their tribe to invest whenever they feel the relationship has reached that stage.
Use soft dividends as incentives
Somewhat counterintuitively, most equity crowdfunding investors aren’t actually expecting to see a return on their investment. They want to be rewarded in experiences and ‘stuff’. The Financial Times recently ran a feature on crowdfunders searching for the next Facebook or Apple, and they concluded that most investors expected to lose their money. If they win, they win big, however, that’s not the primary incentive. Feeling part of something was more of a driver.
This can be evidenced with Crowdcube alumni Wool and the Gang, where investors were given the option of receiving store credit or their original investment returned. Most crowdfunding investors opted to receive the credit.
So, if you do decide to sell shares to your customers, take into consideration that perhaps the post-consumer will want to receive ‘soft dividends’ (exclusive stuff/ insider knowledge/ experiences) instead of just a financial return.
Give them what they need to brag to friends
Reward your investors and best customers with early access or exclusive merchandise. For example, Monzo built the fastest growing bank in history by simply giving their early adopters and investors a Golden Ticket that allowed them to jump the queue in getting a zero commission/ fees pre-payment card that they could use abroad. Sometimes the gestures don’t need to be grand or expensive. Ultimately a post-consumer wants to be able to tell their friends they were part of something. By giving them the tools to brag, you’re enabling a culture of word of mouth, authentic marketing, which is pretty much the only kind of marketing that will be trusted in a post-consumer age.
In the post-consumer world, you need to communicate regularly and be transparent about both the bad stuff and the good stuff. That way you’ll build trust and create deep relationships and loyalty from your tribe of post-consumer stakeholders.
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