In any product category, roughly 10% of the consumers account for more than 50% of the profits. These super-consumers, as we call them, are the hot dog buyers who eat five pounds of hot dogs a month, wolfing down as many as 4 per sitting. They are the stapler users who own 8 different staplers. They know what they want, they'll buy a lot of it, and they'll pay a premium for it. They're passionate and engaged -- sometimes even a little obsessive -- and they exist in every category, from soft drinks and air travel to fast-food and oral care products.
Many managers assume that their super-consumers are a unique species whose extreme appetites say little about what more casual consumers might go for. They also figure that their super-consumers are already sated, so there's no point in probing them further. That's a mistake.
We've found that companies that listen to their super-consumers and use their insights to refine their message ultimately grow sales and margins across all segments. These companies aren't trying to convert light users into heavy users. Rather, they're figuring out what it is the super-consumers like so much and then offering it to them. Invariably, acting on the insights from those consumers who spend disproportionate time and energy in the category uncovers insights and innovations that encourage trade-up behaviors across other segments as well.
Consider this: A stapler company we consulted for found itself heading for a price war with competitors. What to do? Market research with its community of stapler groupies -- users who stapled ten times as much as the average person -- found that they valued anti-jamming above all other features, and would happily pay a premium for high-performance, jam-free staplers. Running with this insight, the company redesigned its point of sale to emphasize electric staplers and refocused its marketing message across all products on benefits (like reliability) rather than features (like color). The strategy boosted sales by 20% and improved margins overall. Not only did electric stapler sales increase (fueled by super-consumers), but the merchandizing strategy emphasizing the benefits of trading up increased sales of heavy-duty manual staplers across other segments.
Or consider how a refrigerated-meat manufacturer used super-consumer feedback to develop a fuller understanding of its true core customers -- teenage boys and their moms. Their heaviest users, they found, were not summertime backyard grillers, as they'd thought, but households with teenage boys who eat hot dogs for after school snacks. The boys liked the taste of the all-beef products, and how filling and easy to cook they were. The moms liked their quality (certainly compared to the junk teenage boys normally eat). Armed with this insight, the manufacturer focused its portfolio strategy on all-beef products, emphasized taste at point of sale, and shifted its marketing to extreme sports and gaming environments to build awareness among teen boys -- who'd push their moms to buy the brand.
While these decisions were grounded in the insights of the super-consumers, the strategy ultimately paid off across all segments. The brand grew over 40% in three years, increased its share of household penetration and successfully usurped the number one position in the category. While super-consumers accounted for more than 40% of that growth, those weekend backyard grillers drove a nearly equal percentage, with the remaining 20% realized through category expansion. Delivering the optimal product to super-consumers was certainly the primary goal, but in the process the brand succeeded in commanding a price premium and encouraging trade-up behavior across other segments as well.
Has your company tapped the wisdom of its super-consumers? Are you willing to listen to them -- and respond?
Source: https://hbr.org/2009/11/surprising-insights-from-super