Customer Now 2021/01

The new rules of engagement (according to customers)

By Jessica DeVlieger

How did 2020 change the rules of engagement between customers and brands?

For nearly a decade, we’ve tracked the connection between companies and customers. What we saw in 2020 was a complex and rapidly changing picture – fluid emotional shifts, driven by economic, political, cultural and environmental uncertainty.

Over the next 12 weeks, we’ll be sharing what we’ve discovered about the state of the customer, now – and the implications for brands.

The emotional has become essential…

This week we unpack an emerging macro-trend and highlight the brands set up to succeed – or not – in that new emotional landscape.

In 2020, one of the macro-shifts we observed among consumers was that the essential became emotional and the emotional became essential.

Brands and categories that had previously had the most functional connection with customers became much more emotionally resonant (and the same shift happened in the opposite direction).

Within that, meeting customers where they are (on their terms), taking meaningful action and demonstrating deeper levels of empathy became more important as differentiators than ever.

Sectors that have traditionally played a background role in our lives made emotional gains in 2020.

Here are the five brands to watch in 2021…

UPS: A new kind of hero

Customer benchmark
#1 in Logistics
#27 Overall
Q2 revenue
$20.5 billion (+13.4% YOY)

He [the UPS driver] is always stopping, saying hi, how are you; how is your mom; how is your dad. The kindness that he spreads is unreal. Especially during this difficult time, to have Anthony [the driver] around it’s truly amazing. He is what we needed in 2020.”

Robert, Age 55, California

It’s not uncommon to see one category shifting ahead of another in any given year – but accelerations in logistics were dramatic. So much so that logistics – which has traditionally been a lower quartile category in our benchmark, leaped into the top quartile – up there with highly emotive categories like beauty and automotive. Such a leap represents a sudden and significant shift in the emotional relevance of the category as a whole.

But why?

Simply put – during an ordinary year, deliveries mostly happen while you’re out. They’re a background noise at best, an administrative burden at worst. but in a world where you can’t leave the house, they have primacy. When you can’t get to the shop, you’re much more significantly aware of how the shop gets to you. In this context, customer / driver interactions became a social and emotional touchpoint.

UPS drivers forged relationships with the people they served, becoming part of their communities in authentic and emotionally tangible ways. While delivering, drivers took time to wave and chat with customers, to ask about their health and welfare, to play ball with their kids. They participated in celebrations like birthdays even arranging birthday parades of UPS trucks for children. In return, customers have shown genuine love for their drivers holding community wide thank you parades, using GoFundMe to raise money for drivers in need, and organizing community events where kids dress up as their local driver. Always essential services, UPS took on a new lifeline status.

Netflix: Still the social capital company?

Customer benchmark
#4 in Media
#63 overall
Q3 2020 revenue
$6.44 billion (+YOY)

One of the surprising losers of the pandemic – according to customers – is Netflix.

Beyond great content, Netflix has historically provided customers with social and emotional capital. The content empowered customers – those with access to Tiger King, Narcos, The Crown and Stranger Things – were all a part of the conversation. ‘OMG did you see…’ became staple chit chat around the office water cooler.

But what happens when the water cooler disappears?

Netflix’s ability to enhance our social status and forge a sense of connectedness (the intangible benefit) became diminished in 2020. In turn, the streaming started to play a more functional role, in helping people pass long chunks of time – to survive the boredom. Coupled with an unpopular mid-pandemic price hike, we are beginning to see weak signals of discontent from consumers becoming more skeptical of the brand, even as they continue to use it.

This provides a huge white space. And if Netflix’s past is anything to go by, the next innovation is just around the corner.

HEB: The people business, that happens to sell groceries

Customer benchmark
#1 in Grocery
#4 Overall
$28 billion (+ YOY)

At the start of the pandemic, through our Customer, Now study, we observed that the status of supermarkets had become elevated to that of a “Fifth emergency service” in the minds of consumers. As consumers experienced queues for groceries and scarcity for the first time in decades, it’s little wonder that stores that managed their supply-chain and customer relationship successfully through the volatility are front of mind.

HEB is a Texan grocer that first caught our attention several years ago – customers consistently rate it as one of the most customer centric companies around – irrespective of category.

Everything HEB does is in service of the customer and the community. Their Vision Statement is: Because people matter. We’re in the people business. We just happen to sell groceries. And the business amplifies that positioning through every action it takes to ensure that customers and the community get what they need, when they need it, no matter how difficult the circumstances and they do it in a human and authentic way.

2020 really gave HEB a chance to show customers what it is made of with a pandemic preparedness response that was better that its largest, multi-national competitors and even the federal government.

It turns out HEB has a Director of Emergency Preparedness (a full time, year-round position) and an already established pandemic plan dating back to the 2009 Swine Flu outbreak. A masterclass in foresight and planning, weeks ahead of their competitors HEB implemented extensive safety and operationalization measures to protect both customers and employees while avoiding shortages in store. One customer put it best when they said:

“We are in dire emergency status. With the pandemic you can talk to Texans and ask about HEB. There is no company like it. It’s a people store, not just a customer-based company. Truly there is too much goodness to continue typing about.”

Kyle, Age 26, Texas

Knowing the depth of customer love for HEB, we weren’t surprised to see the company take the top spot in Dunhumby’s 2020 Retailer Preference Index, jumping ahead of Amazon Fresh and Trader Joe’s.

This Texas grocer might have a restricted geographic footprint, but they have an outsized presence in the industry.

PayPal: Levelling up

Customer benchmark
#4 in Financial Services
#32 Overall
Q3 Revenue
$5.46 billion (+YOY)

While PayPal is unequivocally a payment provider, it is also explicitly ‘more than just a button’. It reinvented its business model to support the role it wants to take in creating a more equal society and better financial health – for customers and employees. This reinvention initially led to a dip in stock price and controversy in the financial markets – but is now understood to have driven exceptional levels of customer and employee trust, and ultimately shareholder value in the medium and long-term.

After discovering that some call-center employees were struggling to make ends meet, the company recalibrated salaries to ensure that every employee has an acceptable standard of living. During the pandemic, after execs noticed a high number of customers looking to quickly and securely receive their stimulus check, Paypal chose to waive fees around these ‘distress’ transactions. And there’s more. PayPal also made a $500+M commitment to support and empower Black-owned businesses, strengthen minority communities and fight economic inequality – including millions in immediate COVID-19 relief.

Pairing their slick digital service with a customer first approach, it’s no real surprise that PayPal enjoys some of the highest rates of advocacy of any financial services brand and, in our benchmark data, it doesn’t have a single active detractor. Not one.

Learn more about PayPal in our Outside In Podcast conversation with Dan Schulman.

Nike: Still the empowerment company?

Customer benchmark
#17 in Apparel, Shoes & Accessories
#173 Overall
Nike Fiscal Q221 ending 30-Nov-2020 revenue
$11.24 billion (+8.8% YoY)

There’s little doubt that it’s been a turbulent 12 months for Nike’s new CEO, John Donahoe.

For the first time in more than a decade, total revenues are down -4.35%. Yet, there’s little doubt that Nike has captured the attention of the stock markets. Despite a March crash, Nike exceeded pre-pandemic market valuations within three months – going on to close 2020 with their highest stock price valuation ever ($141.47 USD as of Dec 31st – and still growing). D2C transactions now make up 35% of total revenues – a number that has grown consistently and steadily over the past decade.

The markets have confidence in the global brand. But what about American consumers?! Nike is increasingly divisive. Whereas in the 90s, Michael Jordan may acknowledge ‘Republican’s buy sneakers too…’, the Nike of 2021 know what they stand for, and who they don’t.

Bold campaigns featuring Colin Kaepernick and Megan Rapinoe stimulate important social conversation – and bring Nike many fans – particularly amongst younger, more affluent consumer demographics. But operationally and culturally, there are challenges: a discontent in thier Portland head office around the tangibility of the Nike diversity credentials; a new strategy that pulls a deep emotional understanding of key sports verticals (running, soccer, golf, etc…) into the more generic retail verticals of male, female and kids – and a reorganization around direct sales strategies (with NikeTown and D2C offers usurping traditional, independent, small town Mom & Pop stores).

Closer to home, they risk alienating key demographics in their single biggest market – in a bid to be seen (at least) as leaders in a global conversation.

A prevailing question: Is Nike a sneaker brand that does great marketing, or a marketing business that makes great sneakers? And which do consumers value more?

Time will tell.

Customer Now 2021

How did 2020 change the rules of engagement between customers and brands? For nearly a decade, we’ve tracked the connection between companies and customers; what we saw in 2020 was a complex and rapidly changing picture – fluid emotional shifts, driven by economic, political, cultural, and environmental uncertainty.

Over the next 12 weeks, we’ll be sharing what we’ve discovered about the state of the customer, now — and the implications for brands — answering three key questions:
— What really changed with customers in 2020?
— Which behaviors are here to stay?
— Which brands are set up to succeed in 2021?


In March of 2020, we launched “Customer, Now” – an online community of 504 people in China, Germany, India, Japan, UK and the US, to build an ongoing relationship over-time and understand more deeply how the events of 2020 were affecting them. We produced weekly “episodes” on from “Customer, Now” through 2020.

Our COVID tracker, fielded weekly from April 10-13 through July 2-6, 2020, with a total of N=68,358 (base for all analyses unless otherwise noted):

  • US n=57,985: sample with respondents from all 50 states.
  • UK n=2,783: sample with respondents from England, Scotland, Wales, and Northern Ireland.
  • Global n=7,590: international sample with respondents from 45 other countries, including India, Canada, and Mexico.

Our customer benchmark has surveyed more than 125,000 US customers over 6 years, to benchmark which brands they love and how this picture changes over time. Companies are rated across more than 30 different brand behaviors as well as several outcome measures including NPS, recommendation, discouragement, and intent to purchase. From this, we have identified a core battery and four additional levers that help companies form strong emotional connections with their customers. In 2020, we also included in our benchmark 5 brand behaviors specific to COVID which form their own index alongside several other COVID specific questions. We found these metrics to be especially important in our on-going monthly tracker which we began back in the Spring to track consumer sentiment in relation to COVID.

To hear more about this framework, get in touch.