Experiential marketing is on fire all over the world. This type of marketing allows customers to directly use or interact with brands through experiences such as online and offline events, sampling, contests, roadshows and sponsorships. The fire is seemingly spreading so fast that Global marketing trends in 2022 predict that brand owners, businesses and retailers will embrace experiential e-commerce at an unprecedented rate. Yet, Africa’s reality paints a different picture.
Think of Angela Gugu’s case in Nairobi. She is the proud owner of a fintech startup in Nairobi that invested thousands of Kenyan shillings for roadshows and other experiential activations to launch a new service. Over one thousand people attended the experiential events, but less than 5% of attendees patronised the new service. Customers are happy to experience brands for free during trials and shows, but very few patronise the brand subsequently. The big question is, why is experiential marketing failing to deliver the expected return on investment for African brands? When 80 per cent of the Western world’s consumers say the ability to sample or see a product or demonstration is a critical purchase factor and 98% say an activation experience made them more inclined to purchase, why is the experience failing to promote sustained brand patronage among Africa’s consumers?
Insights from our strategic survey and consulting expertise reveal four fundamental flaws businesses and brand owners make when deciding on experiential marketing.
Assuming that experiential activations will keep the customer: Brand owners often think that well designed experiential activations attract and retain customers once they get introduced to the brand. Findings from our research reveal the opposite. While 77% of sampled consumers in Nigeria made their first purchase after participating in an experiential activation, only 30% made new purchases after the first one. Another important finding was that 60% did not endorse the brand or recommend it to their peers after an experiential activation. These findings reveal that incredible activations may entice customers to try a brand but are not enough to generate brand loyalty.
Confusing experiential with event marketing: While some brand owners are unclear about the meaning of experiential marketing, others assume it is all about selling products and services during events. The situation is not entirely surprising because the experiential marketing industry is still nascent in some parts of the continent. In South Africa, experiential marketing agents do not exist, and activations are executed and monitored by brand or advertising agencies. Kenya’s agencies focus more on branding, while Nigeria has experiential marketing agencies and a professional association for practitioners in the space. Experiential marketing activities are not regulated in some parts of the continent, and agencies hire inexperienced models or performers to execute activations at short notice. Limiting this marketing field to managing events leads businesses to fixate more on the event experience than on creating real value for the customer. Companies on the continent need to understand that experiential marketing is not just about planning events but is also about fusing high-value experiences into a customer’s entire buying journey.
Experimenting with experiential marketing: Brand owners in Africa often play a hit and run game when involved in experiential marketing. They recruit agencies at short notice, offer few guidelines for action and expect significant returns on their investment. In some cases, brand owners shut down their thinking and expect agencies to produce magical results. Hit and run or try and see strategies typically produce dismal results because they focus on short term gains. Long term strategies have higher chances of success.
Narrowing the scope of experiential marketing: Brand owners use experiential marketing agents mainly for product or service launches but do not involve them in other stages of the offerings’ life cycle. A good example is a case of a mobile payment app in Nigeria that launched a new service through activations in a reality TV show. The campaign yielded 1 million app downloads but very few active users. Experiential marketing activations can quickly generate leads but often fail to deliver high conversation rates when disassociated from the customer lifetime value of the brands they sell.
Some African agencies are aware of these flaws and support brand owners to overcome them. Other agencies capitalise on the ignorance of brand owners to charge high fees based on subjective and vague terms of reference. The consequences are limited returns on investment, high execution costs and possible brand damage. How can brand owners in Africa profit from experiential marketing? Here are five valuable strategies.
- Use the activation to increase your brand value: Customers buy when the product or service does the job it is expected to do. Value is what retains customers and not just promises or ephemeral experiences. Brand owners who focus on activating experiences without thinking about how those experiences increase the brand’s perceived value will waste their investment. Our survey revealed that first-time customers do not patronise brands after the first activation for several reasons. 20% of respondents complained about unkept brand promises, 11% spoke of lousy customer service, 18% said of the failure of brand owners to act on customer feedback after activations, and another 18% complained about feeling coerced to participate in activations without their consent. These findings show that customers in Africa do not regard value as making extraordinary promises but rather as consistently fulfilling simple promises. Every activation offers a unique opportunity to enhance and not simply project value propositions.
- Align before you execute: Planning and running an experiential event requires careful thought. It is essential to ask how the event fits into the brand portfolio? Activations must align with the positioning strategy, target audience and brand lifecycle. For example, Redefine Properties, a real estate investment trusts company located in South Africa, integrated an experiential activation called the mentorship challenge with Arnold Schwarzenegger and Marc Wainer, Pearl Kupe, and Brian Joffe into the “We’re not landlords, We’re people campaign. Well-aligned campaigns deliver the right messages to the right audiences at the right frequency through the proper channels.
- Integrate your activation into the buyer’s purchase journey and communication mix: Brand owners must understand how activations fit into the overall buying process and complement the communication mix rather than deploy them in isolation. For example, Dufill Plc samples over 8 million children in Nigeria every year. They feed the children in school with Indomie noodles in a fun-filled environment. The activation complemented other communication mix elements and turned the children into a purchase- influencers to their parents. Customers go through a pre-purchase, decision-making, purchase and post-purchase stage. Brand owners must determine the exact role of activations at each step in the buying journey. Offline and online activations must also be in sync. Careful integration can achieve superior results.
- Prioritize intimate customer engagement over massive events: Experiential marketing is not just about designing events that deliver pleasant one-time experiences. It is also about creating activations that elicit close customer engagement during the buying process. For example, through its foundation, Safaricom in Kenya launched the Ndoto Zetu Campaign in 2019 to support social causes and increase customers’ intimacy with its brand. The campaign received a global award in 2018 and created intimate engagement opportunities between the brand and its customers. There are cost advantages for organisations that run experiential campaigns for fewer and more targeted audiences when those activations aim to foster intimate engagement opportunities. Close engagement opportunities can create new opportunities for learning about customer behaviour, consumption patterns, values and lifestyles.
- Think of the customer lifetime value of brands in your portfolio: Buyers in Africa are more likely to favour buying experiences that align with their positive aspirations. Failing to consider the aspirational values of buyers before designing executions can be a costly mistake. Campaigns focusing on present customer needs may miss the opportunity to tap into future aspirational needs that drive customer lifetime value. Brand owners and the agencies that serve them must understand the aspirational horizons of customers who will participate in experiential activities. Planning events that fall out of the horizon may produce unintended consequences.
Experiential marketing can deliver superior financial results in Africa for brand owners who patiently rethink their strategies to focus on strategic alignment, intimate engagement and customer lifetime value.
Uchenna Uzo, Faculty and Academic Director, Africa Retail Academy
Nancy Njiraini, Marketing Professor, Strathmore Business School
Dr Frikkie Herbst, Head of Research at Milpark Business School (MBS), Capetown
Emmanuel Adediran, Business Lead at Mediareach OMD