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How Shopper Insights Trump Conventional Wisdom

How Shopper Insights Trump Conventional Wisdom

Did you ever wonder if marketers were merely frustrated professors?

They are known for declaring rules and laws that create marketing science out of chaos, on topics such as product lifecycle, branding, consumer behavior, pricing strategies and others.

These assumptions become conventional wisdom, but that wisdom is subject to being overturned by more sophisticated analysis.

A case in point was highlighted at the recent Food Marketing Institute Future Connect 2011 event in Dallas. A speaker cited four common marketing assumptions about shoppers, and then offered revisions based on shopper insights (partly using CMO Council data).

Here are the assumptions and revisions cited by Trish Brynjolfsson, vice president of brand and industry development, Catalina:

  • Assumption No. 1: 80% of business comes from 20% of customers.

    Revision: A much smaller percentage of shoppers, only about 2.5%, drives 80% of a brand's volume, and the only way to reach them is through targeted marketing.

  • Assumption No. 2: Supersizing is the key to driving volume.

    Revision: More trips (rather than quantity of goods) actually drive volume, and top shoppers make more trips.

  • Assumption No. 3: Brand buyers tend to remain loyal.

    Revision: Loyalty does change, as many shoppers continue with a category but switch brands.

  • Assumption No. 4: The “First Moment of Truth” takes place when consumers interact with a brand in the store.

    Revision: That first moment may lie outside the store, as a flood of new technologies and media is leading to increased messaging and decision-making before the shopping trip.

So what's a better way than assumptions for marketers to describe and influence shopper behavior?

Her advice is to use shopper insights to “define business opportunities and identify precise audiences” for improved results (see story in SN, May 23).

One effective strategy is to maximize opportunities by encouraging “regimen compliance,” she said.

This refers to using “shopper data to target individuals in advance of their purchase cycles to collapse the time between their purchases,” she said.

“These messages can provide discount coupons and remind people how to use the products.”

Another approach is to help retain shoppers by rewarding loyalty that helps lift sales.

“We can personalize the rewards thresholds based on shopper data to reward the incremental purchases rather than subsidize the existing behavior,” she said.

Still another useful tool is using data mining to help acquire new purchases through brand trial, she said.

These strategies make good sense because they aren't based on general marketing assumptions, but rather on “leveraging insights for personalization,” a practice still underutilized by grocery retailers and suppliers compared to industries such as financial, auto and travel, she said.

This industry is rich with data, targeting tools and creativity, so there's no reason her vision can't come to pass.