2017 Trends Report – The Uncompromising Customer: Addressing the Paradoxes of the ‘Age of I’ highlights the uncompromising nature of today’s customer who increasingly expect brands to deliver experiences that satisfy contradictory needs
Intercontinental Hotels Group (IHG) recently launched its 2017 Trends Report – The Uncompromising Customer: Addressing the Paradoxes of the ‘Age of I’ – at the World Economic Forum (WEF) in Davos, Switzerland. IHG’s research identifies four paradoxes that are driving the decisions customers make in a landscape constantly changing through advances in technology. In this environment, customers do not want either/ or solutions: they want the best of both worlds where the best trade-off is no trade-off.
The four paradoxes are:
- The Paradox of Separate But Connected: Seeking a constant belonging with people, brands and places, while also seeking individuality and the desire to communicate uniqueness of self.
- The Paradox of Abundant Rarity: A desire for luxury to be both scarce and available.
- The Paradox of Seeking a Better Me and a Better We: Seeking personal self-improvement, while seeking public, civic or global improvement.
- Do It Myself and Do It For Me In My Way: A desire to be in control while not being the controller.
Global brands must address these paradoxes through being locally relevant and personally differentiating. IHG has identified six best practices through which brands can create experiences that strengthen customer relationships and grow brand loyalty.
Richard Solomons, chief executive officer, IHG, commented: “Technology has changed the way we behave in our daily lives. This has had a direct, and fundamental, impact on business. Global brands need to address the complex, sometimes opposing needs of today’s customers in order to fulfil their expectations. Delivering a superior guest experience is a key focus for IHG. Building on the theme of this year’s IHG Trends Report, we have recently reached an important milestone for IHG Rewards Club, which now has 100 million members. The largest hotel loyalty programme in the industry is truly global and offers the benefits of a powerful membership community, whilst also providing a personalised experience for members whenever they stay at an IHG hotel.”
The six best practices are:
- Aim for integration rather than balance: Balancing conflicting customer needs is not enough; a better holistic experience needs to be created through the integration of these opposing needs.
- Use needs-driven occasion-based segmentation for superior business management: Segmentation is not solely a marketing tool, but needs to be a core part of a company’s thinking.
- Communicate with conversation: Brands must listen to customers to understand their needs and communicate with them in a way that makes the experience more meaningful to them as individuals.
- Manage the brand’s multi-dimensionality: A brand must include relevant and differentiating features as well as functional, emotional and social benefits. The combination of these builds a distinctive brand character.
- Develop ambidextrous brand-business teams: A brand needs teams that include divergent thinkers, with individual strengths and passions, who can also work in an integrated manner to create the cohesive initiatives that drive brand success.
- Address the paradox of brand control: Businesses must not give up control of the brand to the external world, yet they must allow the consumers have their say and help influence the brand’s reputation.
The 2017 IHG Trends Report is the fifth in a series of reports that share insights into the changing world and provide best practices to help make brands fit for the future. The insights it contains are based on a series of related studies spanning a five-year period and involving nearly 40,000 interviews with travellers across the globe.
Since the first report in 2013, the series has examined developments including the transition from brand experiences to brand relationships in the hospitality sector; delivering global, local and personalised brand experiences; the growing importance for companies to build both brand and organisational trust and how to make membership meaningful at a time when loyalty is becoming ever more important to many industries.
The 2017 IHG Trends Report has been compiled in association with IHG’s long-time partner, Arcature, and through using its own research and observations as well as a variety of external, third party sources.
The Paradox of Separate but Connected: The new definition of connection
- Technology, digitisation and the 24/7 existence have changed how we relate to family, friends, strangers, automobiles, appliances, our homes, medicine and entertainment. More than contacting, communicating, and collecting “friends”, connecting means integrating with individuality. In The Age of I, connection means bonding together with others and brands to augment a community while at the same time communicating uniqueness of self.
- The Paradox of Separate but Connected also reflects our need for the optimisation of connecting and disconnecting: individuals seeking constant belonging with people, brands, places and things while seeking personal asylum from intrusive alerts. Always on, we are in contact at all times, linked in the flurry of the never-ending fast news flash keeping us up-to-date. We connect with the environment, with local cultures, and with products and services enmeshing us in the world, yet individually, we want time for solace, silence, and solitude. We face the paradox of both constant up time and also the need for regular down time.
- Constant connection and sharing create databases that erode privacy. Disconnecting would bring back privacy but at the sake of being connected.
- Today our attention spans are shorter. The result is that brands must meaningfully connect in mere seconds. Generation Z wants information as quickly as possible yet they lose interest quicker than other cohorts. Brands must affect people who connect and disconnect in the blink of an eye.
- People have sacrificed human connections for digital dimensions. We want both: the optimisation of human touchable and conveniently clickable.
- Implicit in the new definition of connection is that social networking is no longer a channel strategy or a communications tool: it is a way of life, a way of having individual freedom with personal interdependence within the network. Social networking is today’s evolution of community – technology makes it easier for us to connect with those who share our interests.
- The new meaning of connection creates paradoxes in the way we work. For example, I am part of a business brand and I am my own business. The on-demand economy connects unified branded work communities of individuals who operate as independent businesses: an untethered force of individuals integrating into organisations on a flexible, personal basis creating a brand experience of unity with diversity.
- Also, new office spaces offer places for people to work individually together with others just like them, reflecting the individuality and inclusiveness of the Age of I. “We Work” spaces are an example. Additionally, research shows that Millennials believe work is a place for career-building connections, more than a place to build a career.
- Age generates connection paradoxes. Cohorts respond differently to how, when, why, and where to connect. Brands (organisations) need to juggle conflicting connection needs. For example, Gen Z appreciate brand sharing for connections but want personal safeguards, while Boomers are sceptical of brand sharing but participate because they want brands to know them.
- The Kinship Economy is defined by the business evolution of brand experiences based on transactions to those based on relationships, changing attitudes from feeling disconnected, to feeling connected, to wanting to feel interconnected. Brands are credible interconnectors with customers, prospects, loyalists, and membership communities. People want a feeling of meaningful membership in an interconnected community that also respects their individuality.
The Paradox of Abundant Rarity: The changing definition of luxury
- In The Age of I, luxury is no longer something scarce, expensive and available only to the lucky few. Luxury means different things to different people in different situations. Luxury is a multi-dimensional concept reflecting multiple conflicting needs and desires. Luxury can be the most premium, most exclusive, elusive offering for a small group of wealthy people. Or, luxury is an offering maximising both scarcity and availability. In other words, the potential profitable paradox challenge will be a luxury brand that epitomises “abundant rarity.” Globalisation hastens this luxury paradox: being available in more places where more people can experience luxury, makes it less rare.
- Demographics generate luxury paradoxes. For example, Gen Z, the generation following Millennials, define luxury as products and services that anyone can access and that highlight one’s individuality. Truly authentic, original, crafted products and services are available luxuries.
- Today, giving to others is considered a luxury. Giving helps others, while transforming the giver. For example, Carnival Cruises created a luxury vacation category they call “social impact travel” where customers help to transform the areas of their ports of call. The cruise line thinks of this as mobilising and educating their travellers for the better good.
- Privacy is a vanishing luxury; so providing “secure privacy with personalisation” is one way to deliver a luxurious brand experience. Privacy has become a valuable asset.
- Brands providing a feeling of relaxation, restoration, and rejuvenation deliver luxury experiences. Yet we live in a techno-world. Comforting technology puts our minds at ease.
- Time is a luxury. A paradox of luxury time is the maximisation of desire and delay: instantly satisfying desire while building the anticipation (and waiting-list status) of delay.
- Today, we can experience luxury without having to own the luxury. Luxury experiences are available for hire, from yachts, gowns and cars, to homes and villas. Access-based luxury demonstrates how important the total brand experience is relative to actually purchasing and owning the luxury items.
- Luxury and prestige are different, although not mutually exclusive. A prestige brand has widely recognised prominence, perceived worth and/ or importance, expressing money and power. A luxury brand has extravagance, sensuousness, and great comfort. Prestige means, “I am important.” Luxury means, “I feel indulgent.” A Patek Philippe watch is prestigious; an Omega watch is luxury.