Verifying authenticity: the link between customer engagement and brand protection
Product authenticity verification systems are much more than a way to combat counterfeiting
According to The Guardian, the trade in counterfeit goods is worth $600bn per year, and that is why having a system for verifying authenticity is so important. After all, that money ends up in the hands of crooks instead of corporate coffers, and this is not good for brands.
However, product authentication is more than just a form of brand protection; it is also intrinsic to increasing customer engagement.
Authenticity and brand protection
Authenticity and brand protection are two issues that are inextricably linked.
In a world where counterfeit products are rampant, it is essential for companies to have a system in place to verify the authenticity of their products. Not only does this protect the company's bottom line, but it also protects the customer from being duped into buying a fake product. This is particularly true for luxury and second-hand products, where authenticity can be difficult to determine. By having a system in place to verify authenticity, companies can ensure that their customers are getting what they paid for.
Not to toot our own horn, but a good example of how verifying a product's authenticity helps brand protection is the authenticity verification service powered by Certilogo.
Our system allows customers to check that the products they are about to buy are authentic. All they have to do is simply scan the tag on the product label with their smartphone (QR code, NFC, CLG etc) to start the application and receive a response in a couple of seconds.
But authentication systems work also for B2B.
One well-publicised example is the case of LVMH and Alibaba. In 2016, LVMH accused Alibaba of doing too little to stop the sale of counterfeit products on its platforms. In response, Alibaba set up a system to verify the authenticity of products sold on its platform. The system, called "Alibaba IP Protection Platform", uses big data and machine learning to identify and remove fake products. It also provides a channel for brands to report counterfeit products. Since the launch of the platform, the number of complaints about counterfeit products on Alibaba's platforms has decreased by 70%.
Authenticity and customer engagement
What we have described above also has positive effects on customer engagement.
It is no mystery that the relationship with consumers needs trust and offering them a means to verify the authenticity of the products they purchase certainly serves the purpose for at least two reasons.
First of all, they can be sure that they are buying a genuine product.
Then, a recent study by Harvard Business School found that customers who were able to authenticate their purchase felt a greater sense of connection with the brand. Indeed, when customers are put in the position to be in control over their purchase, they feel the brand cares about them and so they are more likely to engage with it. Their brand loyalty increases too.
But there is more.
A virtuous circle
Usually, most of the methods for verifying the authenticity of products are digital.
This is also due to the fact that the increase in e-commerce has required new tools for online brand protection. Simply put, if you want to buy a branded product in your city, you can go to the official store to be sure of its authenticity. On the contrary, online you can never have the same certainty, as counterfeiters could use branded content and images. Digital technologies make it possible to overcome these limits. Moreover, they make possible two other very important activities for companies:
- the collection of data
Digital authenticity verification systems generate a lot of data about the products that are verified but also about customers. Brands can collect information about preference, habits, and needs. They can use this data can be used for customer segmentation and to improve the customer experience, for example by offering products and services better tailored to the individual customer;
- the interaction with customers
Digital authenticity verification systems also provide brands with an opportunity to interact with their customers. This interaction can take many forms, for example:
- Sharing content about the product (traceability and transparency) or the brand (i.e, commitment to sustainability),
- Asking customers to provide feedback on their experience with the product,
- Improve customer service,
- Sending special offers and discounts to customers who have verified the authenticity of a product,
- Setting up a digital loyalty program.
For example, when a customer registers the product they bought on the brand's official website, they have to enter some personal data. In addition, they may receive a cycle of emails that include discounts on further purchases, the request to participate in a survey on the user experience, an invitation to visit the official profiles on social networks, and much more. If the registration takes place via an app, the brand can send push notifications to notify the customer of offers, new products, and new content.
The greater the brand's ability to offer the customer content and offers of interest to them, the longer and more satisfying the interaction will be.
As we have seen, the brand can offer a personalised customer experience by using the data it collects from authenticity verification systems.
Why is customer engagement so important?
A study by Bain & Company found that a 5% increase in customer retention can lead to an increase in profits by up to 95 percent. Furthermore, studies shoe that acquiring a new customer is more expensive than retaining an existing one.
Customer retention is a result of many elements, including customer engagement. In other words, customer engagement is a key driver of business success and, as we have seen, authenticity verification systems provide brands with an opportunity to improve their relationship with customers.
That is why customer engagement should be a top priority for companies, as it is essential not only for offline and brand protection, but also for customer loyalty, profitability and growth.