Let’s use Toys “R” Us as an example. They were in business for 70 years before ultimately filing for Chapter 11 bankruptcy protection and thereafter liquidating.
While companies like Walmart and Amazon may have taken additional market share with their ability to offer lower prices, Toys “R” Us likely would have survived if they had taken better advantage of their own influence. By the time they filed for bankruptcy, nearly every living generation in the U.S. had at least some active awareness of the brand.
In 2019, the National Retail Federation said: “Nearly nine in 10 parents say their children influence at least some aspect of their purchases — either for household items or for the kids themselves.”
This wasn’t a new trend in spending. Businesses and entrepreneurs need to be responsive to market changes without being impulsive and tone-deaf. Years ago, more parents also began focusing on giving their children experiences. That didn’t make products obsolete; it simply created the need for a company like Toys “R” Us to accentuate their products with services and experiences.
Instead of using their influence to take charge of brand responsiveness and not only retain but grow their customer base, they failed to take the lead. Don’t make the same mistakes. Here are five reasons why influence is more important than brand awareness.
1. Brand awareness won’t keep you from going bankrupt
Consumers still rely heavily on product and service recommendations which is why influencer marketing still works so well. When consumers are indicating their wants and pain points, allow them to influence your direction. Brand awareness doesn’t happen overnight or with one person. Appropriate and ethical influencing of consumers can yield immediate results and can start with a single act or person. It might even save a business from becoming dismantled.
2. Even negative buzz can create opportunity
If you make a mistake as a company or brand, acknowledge it. Offer a sincere apology, then take immediate and corrective action. Implement a strategy for preventing a repeat scenario. Consumers are often willing to forgive errors when a company is willing to take responsibility for them.
3. Influence directly affects behavior while brand awareness may not
Suppose a colleague asks you if you’ve ever heard of hamburgers and french fries. You’re probably thinking, who hasn’t? They are some of your favorite foods. In fact, you know where they come from and where to buy them, how to cook them, and all the ways they can be served. That’s brand awareness. Great! For lunch, you grab a bag of chips from the vending machine and a cup of coffee. Hamburgers and french fries get no benefit.
If the same colleague said, “Hey, let’s go grab some hamburgers and french fries down the street,” you might agree. Knowing about something and consuming it are two very different things. Influence over brand awareness, again.
4. A brand that works to influence will also work to innovate
According to a 2019 article in The New York Times, “At some drive-throughs, McDonald’s has tested technology that can recognize license plate numbers, allowing the company to tailor a list of suggested purchases to a customer’s previous orders, as long as the person agrees to sign away the data.”
Another trend that has been on the rise for some time in B2C products and services is personalization. Is there even a handful of people who have never heard of McDonald’s? They’re masters of brand awareness, but that alone doesn’t optimize their profits. They’re always looking for ways to influence consumer spending in their direction by using innovative approaches to enhance consumer experiences.
5. Everyone has influence over someone
People talk and share stories. Whether it’s in person or in digital form, your business will be mentioned more often than you think. Every interaction your brand has with another person, whether or not they are a customer, is an opportunity to immediately influence their opinions and actions.