Should Your Advertising Target Heavy Buyers ?

November 11, 2010

Heavy users are every Marketers dream segment. Large sales, highly profitable (usually), and inclined to stay with your brand forever. Large sales: yes;  highly profitable: usually;  inclined to stay with your brand forever:  not necessarily.

Should Your Brand Advertise to Heavy Buyers ?

 

Do Heavy Buyers Really Stay Heavy ?

Jenni Romaniuk and Samuel Wight, both of the Ehrenberg-Bass Institute of Marketing Science, recently conducted an analysis of heavy buyer buying behavior using 2006 Kantar Worldpanel data.

Buying behavior was defined using multiple schema—using both relative consumption (e.g. top 20% of consuming HH’s) and also purchase frequency (number of purchase occasions per year).

They examined 15 categories and 139  CPG brands across the 2006-2007 time period. Their analysis shows that, on average, about 50% of heavy buyers become non heavy buyers of the same brand in the next year.

Let me put that differently: heavy buyers aren’t heavy buyers forever. They can become light or non-buyers if you’re not paying attention to them.

Heavy Category Buyers and Category Effects

Of course, some heavy buyers become non heavy buyers because they leave the category (e.g. parents of a diaper age baby). But even after looking at category heavy buying, Romaniuk and Wight’s analysis still shows that 65% of category heavy buyers remain heavy buyers in the subsequent year.

This is surprising to say the least. What should Marketers do about it? Romaniuk and Wight suggest focusing on light or non-buyers given the annual churn of heavy buyers and also the fact that growing brands growth is often due to the acquisition of non or light buyers.

I agree with this, but also think that CMO’s need to ask the question: “what do I need to do to keep my heavy buyers buying heavily?” And, how do I turn light buyers into heavy buyers?

3 Considerations for Advertising to Heavy Buyers

1.  Heavy buyers are not heavy buyers indefinitely.  As the Ehrenberg-Bass data shows, Marketers cannot just assume that heavy buyers will hang around and stay loyal. You have to constantly re-earn their loyalty.Marketers need to have a continuing dialogue with heavy buyers and find new ways to delight them.

2. Heavy buyers tend to be more profitable.  Although there is some debate on this point, especially in promotion intensive categories, most analyses I’ve ever seen show that heavy buyers not only buy more, they also tend to be disproportionately profitable.

3.  Competitors often target your heavy buyers.  Heavy buyers are attractive not just to your brand, but to competitors as well. Heavy buyers tend to be the gold that every brand likes to mine—so if you don’t mine it, some other brand will.

Targeting Based on Buying Behavior

Dissenting Opinions — Issues with Heavy Buyer Targets

All of the above seems obvious, but there are dissenting opinions on this. Kevin Clancy wrote a blog post in his “Shocking Truth of the Month” series titled: “Heavy buyers are the worst target for most marketing programs.”

His argument is twofold. First, heavy buyers tend to be more deal and promotion conscious and are, therefore, inherently more price sensitive and less profitable. Second, competitive heavy buyers are already “psychologically locked” to a competitive brand and hard to convert.

There are no doubt cases where the first is true–e.g. brands have heavy buyers who buy the brand heavily because it’s often on sale. Make sure your brand doesn’t fall into this trap. His second point contradicts the first. If consumers are locked-in to another brand, then they are inherently loyal and unlikely to be price sensitive.  Lastly, my point is not to advertise to competitive brand heavy users; it’s to consider targeting your own heavy users before they become light users.

50% — A Loss Too Much?

Let’s come back to the central point here:  that 50% of your heavy buyers are likely not going be your brands heavy buyers next year. And on average, this will contribute to a -15% loss in sales for your brand all things being equal.

Assuming you’ve done your homework and know they’re not just loyal, but also profitable, then the question remains: should your advertising target heavy buyers (before they’re not heavy anymore)?

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How Your Brand Can Benefit From “Ownership” Media

September 6, 2010
What do Bose, HSBC and Boeing all have in common? On the surface, not much, but all three brands “own” a slice of media. Not just any media, but a specific media touch point over an extended period of time. Should your brand do the same?

 

3 Examples of “Ownership” Media

Bose / Parade — If you’ve read the Sunday Parade magazine over the years, you’ve no doubt seen the full page Bose ad on the back inside cover. Bose has “owned” this space for years; if you were reading the magazine, you could almost predict with the turn of the last page that you would find—presto—the Bose ad. 

Bose in Parade -- An Example of Ownership Media

Hong Kong Shanghai Bank / Jet Way — HSBC took a different track, deciding to “own” the jet ways that passengers use to board planes. They started this approach with the original perspectives campaign, which juxtaposed two very different points of view about the same topic or item. More recently, they moved to a new campaign, but what remains the same is their ownership of the jet way. 

HSBC -- "Ownership" Media via Jetways

Boeing / Meet The Press — Boeing found its slice of media ownership in the on-line version of “Meet the Press.” If you miss the show in linear TV as I often do, check out David Gregory on-line, and before you meet the press, you meet the corporate Boeing ad. Different week, different ads, different guest. But the one constant on “Meet the Press” is the Boeing brand. 

"Ownership" Media: "Meet The Press" & Boeing

So, what gives? Does it really make sense for a brand to stake out a media touch point, and single-mindedly “own” it over an extended period of time? And should your brand get into ownership media? 

4 Truths about Ownership Media

For ownership media to work, four things should be true. 

1. The media touch point engages your target. 

The starting point for any media ownership discussion is whether or not your target consumer engages with the touch point. Brands need to focus on media touchpoints with high target group usage. HSBC is going after an upscale, affluent group who flies frequently. Where to find these people? Jet ways. Yes, jet ways are an excellent place for HSBC to be. In fact, I saw their jet way ad just before boarding a plane and writing this post. 

2. The content amplifies your advertising message. 

Marshall McLuhan once famously said, “the medium is the message.” Well, it’s not quite the full message, but we know thru research that content greatly influences the effectiveness of the ad that it sits within. Thus, it’s important to identify media that can positively impact your ads performance, before selecting a given media platform. 

If you’re thinking of TV, make sure to consider how your ad performs by genre, or which shows are most engaging, before choosing an ownership program. Outside of TV, consider using Market Contact Audit or a similar service to identify a compelling touch point for your ownership media. 

3. The equity of the media matches the equity of your brand. 

I’m a big believer in advertising/programming synergy. SlimFast ads are likely to work better in The Biggest Loser than elsewhere. Nike golf ads are likely more effective in PGA events. Cosmetic ads almost certainly break-thru better in Project Runway. 

Ownership media works best when the equity of the media fits tightly with the equity of your brand. Making a commitment to ownership media is no small decision. Make sure that the media you commit to actually helps build your key brand equities. 

4. The media platform is enduring. 

How long has Bose been in Parade? I don’t know for sure, but I know it’s a long time. Nielsen IAG research shows that product placement and brand integrations work better the longer you do them in a show; it’s highly likely that ownership media works in much the same way. 

If you’ve gone to the trouble of identifying a media property that amplifies your message and reinforces the equity of your brand, then really own it—not just once or twice, but for the long-term.

Ownership Media – Is it For Your Brand?

Owning your own slice of the media pie is a smart approach for many brands. Bose, HSBC and Boeing, all very different brands, have all made a similar decision to grab a piece of the media eco-system and own it. 

If you’re thinking of doing the same, just make sure to consider targeting, programming, equity synergy and longevity as key criteria in making this important choice. And then, add ownership media to your portfolio of approaches to building your brand. 

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