Brands exist in the minds of consumers, but the manifestation of loyalty comes via purchase behavior, especially repeat buying and a high share of purchases. When I was at the NPD Group as Chief Research Officer, I created a brand equity measurement system in the mid-90s called BrandBuilder that brought those attitudinal and behavioral perspectives together. What we discovered was that attitudes and behaviors were usually consistent from respondent to respondent – but not always. For example, when we defined “high loyals” as those who buy a given brand more than 50% of the time, only about 70% of those consumers had attribute ratings of that brand versus others that supported their level of behavioral loyalty. This led us to wonder if big brands are always strong (as Ehrenberg claimed), or if a big brand could be weaker in the mind, and if this portended a likely decline in market share.

One year later at NPD, we re-contacted thousands of respondents who participated in BrandBuilder studies in one of five categories to identify their preferences and purchases, and to understand the relationship of “real loyals” (attitudes support their loyal behavior) and “vulnerables” (attitudes did not support their high loyalty) to future share. For two-thirds of brands, this way of analyzing brand strength was, in fact, predictive of future share.

Furthermore, most consumers are “low loyal” (less than 10% share of wallet) for a given brand. However, some of the low loyals present as “prospects”. That is, they have positive feelings about the brand that suggests they should be buying it much more than they are. In fact, the conversion rate of prospects over the course of a year was about five times higher than those with low loyalty and no favorable attitudes. This prospect model can be built from brand tracking or brand equity dipstick, and what is particularly exciting is that in a world of addressable marketing, this can be acted on via precision targeting. So, this study from 1996 is even more relevant today!

The paper is available here for free download and has been cited in over 1,100 peer-reviewed papers. At this time, I continue to get 50 or more views of this paper a week from all over the world (which is incredibly gratifying).

Three key points for researchers

With that in mind, researchers are wise to take into account the following three key points:

  1. Use constant sum questioning to measure the behavioral loyalty of consumers towards your brand.
  2. Model attribute ratings and demographic/life-stage factors against the log odds ratio of the estimated share of wallet. Don’t be afraid to offer a predictive view of the brand’s future!
  3. Work with your client and your client’s media agency to identify vulnerables and prospects at scale in addressable audiences from digital marketing for the agency to create targeting plans. This integrates the worlds of research and activation in a way that will make your research even more valuable for your clients.

Header Image: Jarrod Erbe, Unsplash



Source link

Leave a Reply

Your email address will not be published.