February 25, 2013

Sex And Commerce

Back in high school there were people who were "heavy users" of sex. Remember them?

They often had one characteristic in common -- they were promiscuous. They didn't just have lots of sex with one person. As we used to say, they "got around."

The world of commerce is like that, too. Heavy users in a category tend to be promiscuous. They tend to try lots of different brands in the category. They get around.

Someone who is a heavy user in the fast food category might go to McDonald's 4 out of 10 times; Subway 2.5 in 10; Wendy's 1.5 in 10; Taco Bell 1 in 10...etc.

People in advertising and marketing often wrongly equate usage and loyalty. They think that heavy users in a category tend to be brand loyal. And that heavy users of a brand are brand loyal. The truth can be quite the opposite.

In the above example, the heavy fast food user might also be a heavy user of McDonald's. He may go to McDonald's 4 times a week. But he is not brand loyal. In fact, 6 out of 10 times he patronizes a competitor.

This is true in many categories. Heavy users of sneakers (like yours truly) will tend to have Nikes, Adidas, and Reeboks in their closets. Heavy users of wine are very avid brand jumpers. Heavy travelers visit a lot of different locations. 72% of Pepsi drinkers also drink Coke.

Meanwhile, light users can be very brand loyal. My parents didn't eat out much, but when they did, they always went to the same places.

Of course, this does not mean there are no heavy category users who are highly brand loyal. But in general, the idea that heavy users in a category and heavy users of a brand are more loyal than light users is not just mistaken, it is dangerous.

It's dangerous for two reasons. First, because it fosters the infantile fantasy that people care deeply about brands and want to have "relationships" with them.

Second, it has large implications for advertising strategy. Success of a brand is not singularly related to high degrees of brand loyalty. Let me repeat that. Success of a brand is not singularly related to high degrees of brand loyalty. In fact, the most important success factor for mainstream consumer brands is not how many loyal customers you have, but how many customers you have.

Which is why the current obsession with "engagement" is so misguided. The idea that your success is dependent upon your customers becoming deeply emotionally attached to your brand is a delusion. Consumers are promiscuous. Most successful brands have a customer profile that is a mile wide and an inch deep. They're just not that into you.

As Martin Weigel says... "Your consumers are just someone else's consumers who occasionally buy you."

That is also why the current mania for spending enormous amounts of time, money, and energy getting your "fans" to "engage" with you is such a silly preoccupation. Having your customers "like" you may be nice, but having your competitors' customers try you is what builds your business.

Wanna grow your brand? You don't need more engagement. You need more customers.


Kyle Rohde said...

Great perspective Bob. As another example of what you described, I'm very into craft beer and trying lots of different brews. With the Untappd beer tracking app, I know I've had 574 different beers over the past 24 months or so. It also shows that I will travel for good beer and will spend a premium for it. But it also shows how completely disloyal I am, as I purposely won't buy beers I've previously had in the interest of trying something new, regardless of how much I liked or disliked that particular brewery/beer. The only thing I'm loyal to is the app that helps me track this madness!

Anonymous said...

I believe there are some categories where heavy users are brand loyal; cigarettes come to mind. I don't smoke, but my observation of smokers is they each buy a particular brand, to the exclusion of any other brand. They don't even dabble once in a while with a different smoke. Also, I am an Apple fan. Though I use any and every kind of computer in my engineering career (I go back to punch cards and mainframes), at home I ONLY buy Apple. I don't even consider Dell or Lenovo or HP or any other brand. I know others like myself who are Apple snobs.

Anonymous said...

"In fact, the most important success factor for mainstream consumer brands is not how many loyal customers you have, but how many 'heavy using' customers you have."

This seems a bit more accurate, no?

i.e. 2 people who eat at McDonald's 4 times/week each (regardless of where they eat their other meals) are more valuable than 6 people who eat at McDonald's once/week.

Using your sex analogy; loyalty still exists in polyamorous relationships

Anonymous said...

I work on a huge brand that has some of the highest engagement scores on Facebook in our region, but sales keep falling.
Engagement (in this instance) isn't correlating with business success... at all.
I believe that people who engage with a brand on social media are not "normal". They're outliers. And mass marketing is about figuring out how to appeal to the bell curve, not the outliers.

Anonymous said...

Well done on reading a new book.
You're a classic advertising 'thought leader': as fickle as the wind and you never disclose your sources.
You're as boring and mediocre as the boringly mediocre 'new media enemy' you've created in your own little mind.
The industry needs people outside the pernicious, angry little echo chamber.

Jim Powell said...

You got to love this quote.

TV advertising used to work like this.
You sat on your sofa while creatives were paid to throw buckets of shit in your face.
Today you are expected to sit on that bucket, fill it with your own shit and tip it over your head
while filming yourself on your mobile. Charlie Brooker

Anons are getting very brave? How did they take the child safety locks off their Mum's Ipad?

Chris S. said...

It's easy to be a critic in a cloak. Let'em steam. S/he doesn't have to agree with anything Bob says, and we don't have to agree with him/her.

Though there is always the possibility of a troll. Best not to feed it.

MB said...

I have always said you can move mountains with 12 committed people....or watch nothing happen with 1200 who like you on facebook

geoff said...

Not trying to be negative, simply trying to figure this out.

If someone eats at MickeyD's 6 out 10 times, or frequently but not always buys your wine or sneakers -- are they not the absolute perfect people to advertise to on social media?

They may not want to "interact" with your brand (whatever that means), but if they are one of the bazillions of folks who 'liked' your page or follow your tweets or whatever: they are the absolute best low hanging fruit to market to.

If I can send you a "come back to snootywine" coupon for very little cost - because you've volunteered to be on my list -- why isn't that a brilliant strategy?

With painfully obvious exceptions like Pepsi a year or two ago, I think most of us just treat our social media contacts the way we've always treated people on our lists. People who have raised their hands and said "please send me marketing."

Chris said...

Sounds like the same theory as 'How Brands Grow' and would like to hear more arguments for and against mass vs targeted advertising in your future posts.

Michael M said...

Case in point of this would be Apple. They have incredible brand loyalty from their customers (although Samsung is making inroads), whilst traditionally treating them with near contempt. Competitor just released a tablet with a micro SD card for more memory? So what? We're f*cking Apple, douchebag. You'll buy our tablet anyway.

Anonymous said...

Very clever comment and I really like this blog post. One of the more eye-opening ones of yours (though they are all good).

My thought is: will companies realise this? Will the social media buzz end? When or why? Are the companies able to realise that they are being counter-productive in their obsession with likes and re-tweets?

Is it - say it quietly - that they truly have NO IDEA what the 'next' phase of advertising is from now to the next 15 years+?

So they are going to flog this for as long as they can because they have no other new ideas?