How is the relationship between customers and their favourite brands changing – and what do you need to know about it?

There was a time when advertisers could say that smoking was good for you, and a lot of people would believe them. Advertising was a relatively new phenomenon and consumers trusted companies to simply suggest the most useful things to spend their hard-earned cash on.

But increasingly far-fetched claims and the proliferation of media across print, TV and radio led to a number of advertising standards bodies being set up to curb dishonest messages and rebuild consumer trust. For example, the Advertising Association and the Advertising Standards Authority in the UK.

Since then, consumers have wrestled power away from big brands and it’s now more important than ever for companies to go above and beyond to establish trust and justify consumers shopping decisions. The popularity of social media platforms like Twitter and Facebook has led us to a world where consumers have the final say on whether or not a brand can be trusted or not.

Online retailers cannot afford to continue taking the same old approach to marketing and brand reputation. To avoid becoming dinosaurs, businesses need to be open and transparent, proactively engaging with customers to ensure satisfaction and loyalty. Those that do not adapt to this new model and embrace social networks will go the way of the dodo.

These networks, as well as a number of emerging online reviews platforms, enable direct communication between consumers and brands. No more strongly worded letters that may never be opened or hours on hold with call centres – now, brands are so conscious of their public profile that they will almost always respond to a quick tweet or post. Where a call to customer service was a one-to-one interaction, these comments are in the public domain. In comparison, it’s more like shouting your complaint from the top of a hill to a horde of potential customers.

Engaging customers through such honest, transparent communication tools does leave businesses open to criticism, but that’s something brands can embrace rather than shy away from. Negative reviews are a fact of life – no matter how efficient your organisation, the chances are that criticism is going to come your way at some point. But this is valuable feedback to help learn more about what your customers want and thus improve your service.

In a bricks-and-mortar store, your physical staff give your business a ‘face’ and embody your brand. Online, creating this relationship – and the loyalty that drives repeat sales – is much more challenging. Opening transparent communications with your customers across social media and review platforms makes you more ‘human’ and can make people more comfortable buying from you.

While so many High Street shops struggle to survive, online shopping shows no signs of slowing down. Christmas 2013 smashed e-commerce records, while internet purchases for the year were up by almost a fifth – the fastest increase in four years.

As companies of all shapes and sizes embrace digital, an important consideration is how they are perceived by consumers online. It’s vital that these companies are proactive in their approach to managing brand reputation, and the value of knowledge garnered through social media and online reviews should not be underestimated. This information about your brand can be used to drive innovation, develop a better service for your consumers and avoid extinction in the digital age.