Word on the street: How consumers drive brand innovation

Circa 2006, following the Central Bank of Nigeria’s post-consolidation exercise, Guaranty Trust Bank, one of the most successful- and exclusive- corporate banking institutions made a strategic pivot to retail banking. With an energized capital base, the bank was ready to play in a different league. Instead of doubling down in corporate spaces or banking exclusively on in-house lab-grown ideas of next steps, GTBank listened closely to what the streets were saying.

And they were saying a lot.

GTBank easily distinguished itself by providing a superior but lower-cost customer experience than competitors did. Young and middle-income customers were at the time considered unprofitable. GTBank doubled down on this population, a significant feat of itself. The bank rebranded itself as this sexy, friendly alternative, opening its arms to students and young people via targeted and often innovative products such as zero balance savings accounts, instant bank accounts and instant ATM cards.

With less than 40% of adults having access to formal banking services, this was not just a stroke of genius on the bank’s part, it was the banking of the unbanked, a response to a real and acute need. A profitable one too as a whole new generation of loyal Nigerians would eventually remain with GTBank even as they transitioned from students to full-time jobs. This base remained loyal even when GTBank was obviously struggling under the weight of its considerable base. In a matter of time, GTBank had built for itself the right customer base to implement the next wave of their strategy: driving down cost by pushing customers to lower-cost banking services such as internet and mobile banking. It wasn’t just GTBank innovating for the sake, it was simply following the customers.

“We see GTBank creating value no longer as just a bank, but more like a tech platform offering a wide range of services that cut across people’s everyday needs.” GTBank managing director and CEO Segun Agbaje told World Finance, stressing on the bank’s continued drive for innovation.

In the post-internet world, brands like GTBank are coming to the realization that traditional methods that used to lead to innovation no longer work in the ways that they used to. Processes such as new developing product ideas in-house, conducting focus groups and customer research to determine feasibility are still relevant of course. But they do not always reflect customers’ actual needs or desires. Brands are working through this by centering the customer in their innovation efforts.

Power to the customer

The product development lifecycle is increasingly being rejigged. Brands are connecting with customers and seeking input earlier than ever as new products are imagined. Thanks to the internet of things, consumer feedback is now available during the idea generation and design stages, rather than restricted to the product testing phase. Collaborating with consumers in this way enables companies to develop new products and services more quickly and cost-effectively. At the same time, it minimizes the risk that products will underperform or fail by catching the bugs much earlier.

Big Data has never been more useful – or powerful. It has enabled service providers and brands to take a more detailed look at their customer habits. Micro-targeted messages and offers are replacing mass marketing and traditional sales techniques. R&D teams are now collaborating with customers to identify and develop new products. Instead of just “making the sale,” customer representatives are now looking to create brand experiences.

Markets are evolving, the customer is certainly more discerning, and innovations around social media, mobile technology and data analytics are just some of the changes that have transformed customer behaviors and expectations.

Only brands that are attuned to this can compete in this future. Chief Operating Officer at RED recognizes this shift in the balance. She highlights her team’s existing advantage, “At RED, we know what the streets are saying. We have built up a system that’s backed by data, we exactly know what the culture shapers are, where they are and how they are shaping the culture. Our system is built on efficiency and effectiveness and connects to audiences at all levels or segments of communication.”

These are some of the ways that consumers now drive brand innovation.

Social media is here to stay

You test out a new product or service. Where are you likely going to express your immediate thoughts as they occur to you in real time? Social media of course. Social media has become an invaluable tool for soliciting customer input into products and services. Any brand that doesn’t key into this is only setting themselves up for tears and sorrow. While not all conclusive, social media is a vital element in any innovation strategy now. From running with viral trends in future advertising campaigns to taking notes on user experience with a new service, brands can deploy social media before and even after launching any major initiatives.

Sometimes it is just as well that social media is reserved for the marketing and sales end of the product cycle. Passive social listening, as opposed to active engagement, can also provide a brand with a sense of what customers like or don’t like about its products and services. These insights can be just as useful for sparking innovation efforts.

Customer service 2.0.

Customers are changing and so is purchasing behavior. According to retail data, the primary importance of brick and mortar stores may have evolved as 80% of customers tend to have pre-shopped before even entering a store. Hence customers are better informed, more demanding, and ever more aware of their options. Mobile has brought the shopping experience even closer and is likely to used to research and purchase at the same time. Customers know what they want when they enter the store, bank branch or government office. Brands must understand that front-line employees are the critical link between the customer and the brand. Product expertise is an increasingly vital element in delivering superior customer service. Front-line staff will need to find ways to develop an emotional connection with customers in order to determine needs and foster brand loyalty. Sales scripts will soon come to be a thing of the past, replaced by more fluid, natural conversations.

Social responsibility

Good business is good for business. Today’s customers are socially aware and demand transparency from their brands before forming strong relationships. Trust is important and corporate social responsibility programs have developed into an important means to influence brand perceptions not just to do good. Although doing good certainly helps. Market leaders will drive the creation of industry standards that companies can measure themselves against. Such generally accepted and trusted certification can enable companies to more easily and credibly communicate their socially responsible actions to customers.

All that data

Big Data presents opportunities for companies, generating both signal and noise. Social media, open databases and new technology have contributed to a revolution in household and individual profiling. Big Data, advanced machine learning and data-mining statistical methodologies are now used to create customer micro-clusters. These clusters are deployed to drive targeting of marketing messages, delivering the right message with the right offer to the right customer at the right time. Microtargeting insights now influence communications, product development and operations, all at the same time. These new data sources are highly varied and including social media activity, influencer models, previous interests, weather data and web activity. Geographic Information System (GIS) mapping has helped renew interest in tactical messaging and highly targeted marketing.

Diversity is good business

The mass market is no longer a thing that holds much business imperative. As diversity and inclusion initiatives take hold, the specific needs of customers and their communities are increasingly prominent. and brands must be able to speak directly to the experiences of their customers. How do you reach customers east of the Niger? What about the northern region, what do they really want and how do you understand the complexities embedded within? Consumer patterns now expect brands to understand or at least acknowledge their struggles and needs. According to data, consumers from diverse cultural backgrounds tend to spend a higher degree of disposable income and over and typically are early adopters that embrace and drive technology trends.

It is all incredibly exciting and brands certainly have their work cut out for them.