If you’re a marketer and believe that your brand has 100% loyal consumers, you are sadly mistaken. This is according to SPARK Media and data backed by Caxton’s urban community survey, ROOTS 2016, the largest quantitative survey of its kind in South Africa.
“We know from our affiliation and close dealings with marketing scientists at The Ehrenburg Bass Institute (EBI), the world’s largest centre for research into marketing, that buyer behaviour at an individual level is random but that aggregated buyer behaviour can be predicted, very accurately, as is the case in any random system,” says SPARK Media joint CEO, Gill Randall.
ROOTS 2016 shows that of the 2.4 million Purchase Decision Makers (PDM’s) who have shopped for shoes and clothing at Edgars, 40% have also shopped at Mr Price, Woolies (36%), Truworths (4%), Jet (21%) and Ackermans (18%). “Every brand’s market comprises of heavy, medium, light and non users,” says Randall.
“It also stands to reason that your customers are everybody else’s customers, who sometimes buy from you. It all comes down to mental and physical availability and a brand’s ability to be thought of in a buying situation by as many people as possible, on as many occasions as possible.”
Randall goes on to say that studies of hundreds of categories reveal that more than 50% of profits come from light buyers (not 80-20 as we have been lead to believe). “Let’s take Coke as an example. 63% of profits come from people who drink just one Coke a year, simply because there are so many of them.
“Even in the banking sector, customers are shared with competitors,” she says. “27% of PDMS who have a bond with African Bank, have a Standard Bank savings account and 20% have a Capitec savings account. 12% of PDMS who have a bond with ABSA also have a FNB Cheque account and 19% of PDMS who have an ABSA student loan also have a FNB savings account.
As a result, Randall stresses that marketers shouldn’t profile brand users when planning their target market, but rather category users – coffee drinkers as opposed to Nescafé drinkers for example. “Growth for a brand comes largely from acquiring new customers, as opposed to existing customers buying more often. So, mass reach of a category is much more cost effective than investing into frequency strategies with existing customers.
That’s not to say that existing customers shouldn’t be in your sights, but never at the expense of finding new ones.” “The irony is that heavy or regular users of any brand need less nudging to buy an already “salient” brand. Topline ROOTS 2016 data is available on www.sparkmedia.co.za