What do cheese, sour cream and staples have in common? They all went through a rough spot. When their product managers learned to look at their client-base a little differently, they started increasing the stagnant sales for those rather ordinary products! Here’s what they found: Superconsumers are different from what is commonly described as a Heavy User in the field of marketing. And it’s the superconsumers who can bring the most cash!
Kraft’s Velveeta Cheese gets a Fan Club
Velveeta was having a tough time on the market, as trends such as healthy eating and organic products rivalled. To many consumers, Velveeta was a once-a-year purchase for a dip at a party – and so Kraft’s sales with this product were stagnating. Upon analyzing its data, Kraft came to realize there was a core 10% of its clients (a group that represented about 2.4 million consumers) that were generating 50% of its profits. When asked to talk about the cheese, their description ranked Velveeta as a superior cheese: it melted nicely, was very versatile, etc. Even more so- these hardcore fans, once the focus group finished, would exchange phone numbers and stay connected through their passion for the product. In effect, Velveeta was almost a lifestyle for them, a common passion. Kraft soon realized the best way to increase sales for this product was not, as they had previously tried, to get light consumers to use more of this product, but rather, to get superconsumers to do so: Kraft found ways to share more user-generated recipes, they created new derived products such as cheese slices for hamburgers and shredded cheese for pizza toppings, and they switched the product from un-refrigerated displays to the milk and cheese section in the groceries. All of these efforts contributed to over a $100 million sales.
Kraft’s Breakstone Sour Cream Gets a Makeover
Similarly, when faced with stagnant sales of there sour cream Breakstone’s, Shannon Lester, the Kraft-brand manager at the time, had his team look into the small group of superconsumers to understand how Kraft could improve its sales with this category of users. They found out that many of its superconsumers were mixing the sour cream with greek yogurt, to obtain a mix that had half the fat and cholesterol, while having twice the protein and calcium. Ironically enough, Kraft had already put a similar product on the market years ago, with no traction. But this time, focusing on the superconsumers, it was able to introduce it on the market and have it available in 60% of the US grocery stores in a few months only from the launch. In this industry, these numbers were gaged as quite impressive.
How about an 8th stapler?
Conventional wisdom would dictate that offering a user with one or two staples at home with an additional one may get you sale, while offering someone who’s already got 7, would not. Interestingly, researchers found that the superconsumers in the world of staples had on average eight staples each. They were concerned with neat-ness and were super-organizers. To them, having the right staple format was very important so that the quality of the content of their documents were also reflected in the quality of the stapled papers they were delivering. Those users had various staples of various sizes on their work desk, a smaller one in their purse, another one at home, etc. It is precisely by targeting them that the office supply company would be able to increase its revenue substantially, for this product category.
Beyond the Pareto Rule
Although these stories may seem anecdotal, they are actually illustrations of a very important and emerging concept in marketing. When looking at a base of clients, marketers will generally seek that 20% of users that generate about 80% of the business. The Nielsen supermarket scanner data enabled researchers to discover a very similar phenomenon with the top 10% of consumers accounting for 30-70% of sales. These users are labeled as “Superconsumers”.
There is a substantial difference between what was dubbed as heavy users, and superconsumers: while heavy users simply buy a large amount of a product, superconsumers are actually very passionate about the product and are highly engaged with the brand or product. Not only do they spend a lot – they have a very positive, vocal attitude towards the product. In essence, superconsumers are a sub-set of the heavy users, and despite what was traditionally thought about heavy users, they are not maxed out when it comes to purchasing more. These users live and breathe the product, and if they could imagine new uses for it, they would purchase even more. These are the consumers that can boost sales effectively with a minimum investment.
Analytics to track “Superconsumers”
With the arrival of big data, CRMs and analytic tools in the retail world, getting data on consumers is increasingly more feasible. Just by looking at website statistics and user engagement over social media, brands can already start identifying their superconsumers. By linking loyalty programs and tracking the multi-channel purchasing history of users, companies can leverage the sum of the information available about users, from the brick-and-mortar operations down to the online store. It may well be that by focusing on the consumers who most love them, and by giving them back a little love, that the companies may be able to break out of stagnant ruts and start increasing profits again.
This article was based on Harvard Business Review’s Idea Watch of March 2014, “Make Your Best Customers Even Better”. You may access the magazine here.
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