Imagine a world in which the word ‘consumer’ is an insult. I see this becoming a reality soon. We are witnessing a new, deeper relationship developing between people and brands, one born of closer bonds and greater interaction beyond just a purchase. I call individuals in this new movement ‘post-consumers’.
Post-consumerism will be driven by younger Millennials and Generation Z, the generation growing up now. They’ll make eco-friendly buying decisions insisting on buying goods from companies that refuse to engage in unsustainable practices such as planned obsolescence. They will be sustainers rather than consumers, stakeholders rather than customers, tribes rather than crowds.
How can companies ensure they appeal to a more socially conscious audience looking for a long-term relationship?
Create a community brand
The brands of the future will be tribes. Two of my favourite community-focused brands are GiffGaff and Monzo, which have built democratisation into their marketing strategies by involving their customers in major decisions.
GiffGaff has used its customers to write, direct and appear in its TV ads. It provides discounts and rewards in return for providing customer service support. This means GiffGaff has essentially crowdsourced their business model, building one of the UK’s major mobile companies with only a few true employees. The ethos of their brand is to see customers as their true owners.
Monzo, the challenger bank, has taken this further, by opening up a number of crowdfunding rounds specifically for their customers, allowing them to become part owners in the brand. They also involve their community in every major decision.
Brands like this are leading the way. I predict this will become the norm after 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 is growing. It’s also becoming more common for growth companies and medium enterprises to offer shares to their customers.
Challenger stock brokers such as Freetrade are being supported by retailer investor insight platforms like Genuine Impact, allowing DIY investors to make informed and instant decisions about which investments they make.
If you’re a startup or growth company, the best way to get your customers to invest is through an equity crowdfunding campaign. There are plenty of crowdfunding support partners and workshop programmes to take you through the process. 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 sell shares direct to your customers rather than run a public campaign, you can either facilitate this through SeedLegals, or we recommend setting up your own fully licenced, FSA-compliant platform on Envestry.
‘Always on for investment’
As a crowdfunding expert I am a huge proponent of equity crowdfunding. However, I find it quite limiting for companies that wish to be always-open to investment from customers. You can list on a small cap public exchange like AIM or NEX Exchange but that means the additional cost and admin of a public company.
There is an easier way to allow your customers to invest at any stage. One reason 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. This allows any brand to be available for its tribe to invest whenever the relationship has reached that stage.
Incentivise with soft dividends
A recent Financial Times feature on crowdfunders searching for the next Facebook or Apple 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.
An example is Crowdcube alumni Wool and the Gang. Given the option of receiving store credit or their original investment returned most crowdfunding investors opted for the credit.
If you do decide to sell shares to your customers, consider that the post-consumer may want ‘soft dividends’ (exclusive stuff/ insider knowledge/ experiences) instead of just a financial return.
Allow for bragging
Reward your investors and best customers with exclusive merchandise or early access. When Monzo ran a crowdfunding round, they gave their investors a sense of status by providing them with an exclusive ‘investor’ debit card.
Gestures don’t need to be grand or expensive. Post-consumers want to be able to tell their mates they were part of something. By giving them the tools to brag, you’re enabling a culture of word of mouth, authentic marketing.
What’s important? Keep communicating. Post-consumers will increasingly buy into a brand’s stories on social media or through the brand’s advocates. Communicate openly to create a transparent culture that engenders trust and deepens your relationship. This is what the post-consumer will expect. Get ahead of the game by starting this today.
ABOUT THE AUTHOR
John Auckland is a crowdfunding specialist and founder of TribeFirst, a global equity crowdfunding communications agency that has helped raise in excess of £17m for over 50 companies on major equity crowdfunding platforms, with a greater than 90% success rate. John is also Virgin StartUp’s crowdfunding trainer and consultant, helping them to run branded workshops, webinars and programmes on crowdfunding.