Through a special arrangement, presented here for discussion is an excerpt of a current article from the Joel Rubinson on Marketing Research Consulting blog.
Even when consumers prefer your brand — that is, buy your brand more often than they buy any of your competitors — your share of wallet (sometimes called share of requirements) might not be much more than 50 percent.
Are consumers switching for a hot deal? Are purchases and preferences need-state dependent? Are people essentially indifferent towards a few brands on a short list?
From a marketing point of view, is there an easy way to raise your share of purchases among those who already prefer your brand?
One clue comes from R&D I spearheaded into customer retention while at the NPD Group in the '90s. Interviewing the same respondents over two years, we found that brands only retained, on average, about half of their loyal consumers from one year to the next. However, a subset for whom the brand had a strong attitudinal advantage were retained at a much higher rate.
So how does a marketer enhance beliefs that its brand, and only its brand, stands out on benefits that are important to a given loyal consumer?
I believe a new and important answer in a digital, social, and mobile age is to build the largest possible "brand audience," defined as consumers who have joined your brand in some way — liking it on Facebook, following it on Twitter, signing up for e-mails on the brand website, downloading a branded app, etc. This creates a two-way communication channel from kitchen to store and all points in between. It allows the marketer to flip the loyalty equation and demonstrate their loyalty to the consumer with offers, personalization, and listening to their wants and needs.
Listening involves seeing what followers of your brand on Twitter are tweeting about. Every Facebook update is a conversation. A question asked on your brands' Facebook newsfeed can show what's interesting to your fans by analyzing the rates of "people talking about" (likes, sharing, comments).
Research communities of your consumers offer another way you can gain insight into what would delight them and what they think of your brand as its offers and messaging evolve. And finally, show some love. Give those in your brand audience gifts such as promotional offers, inside information about upcoming events, and the gift of being heard.
A constant eye must be kept on three important brand metrics: retention (keeping a customer loyal over time); purchase conversion (the percent of purchases you win from loyal consumers); and the size of the brand audience.
In this day and age, brands are not just products and services, they are media too. And that might very well be the key to improving your share of purchases from those consumers who already prefer your brand.