Knowledge Bank Blog, Range & Portfolio

Real Buyers

How many real buyers do you have?

One of the biggest insults you can give a football supporter (well perhaps not the biggest, some of those aren’t repeatable here…) is that they are not a ‘real’ fan. They are a good times supporter and only come out of the woodwork to watch their team in the big games or when the team is winning. In contrast, a ‘real’ fan is someone who watches the team week in, week out, through thick and thin.

Would you go to watch your team in (insert Northern town) on a cold, wet, January night? That is the type of question that is often used to determine a real fan. Even though the people asking it haven’t been to see their team play away from home for the last 10 years. Not even when the weather is warm.

In any walk of life you have people who are into something and do something regularly and people who are more part time and do something when the occasion arises. This is as true in our industry as anywhere else. However, in our industry it is a more serious issue. This is because many shoppers who used to be ‘real buyers’ of a brand or ‘real shoppers’ of a store are now much more part time. They are less loyal to brands and stores. And often only buy or visit when they are given an incentive to do so – a discount.

There has been a lot of focus in the industry recently on the importance of ‘mental’ and ‘physical’ availability to brand growth. Underpinning this is the belief that penetration (number of buyers) is key to growth. Data from Kantar Worldpanel shows how much churn a brand has in it’s buyer base – namely that a significant proportion of a brand’s heavy buyers this year will not be heavy buyers next year. The inference is that this merry go round of buyers is a fact of life and the key is maintaining and growing penetration and not worrying too much about who those buyers are.

Now penetration is essential. Without buyers you don’t have a business. But anyone can get someone to buy their brand or visit their store once. For many brands and stores, 100% penetration with a frequency of 1 purchase a year would be a big issue. Successful retailers and brands have a strong user base. But they also get those users to buy again. And again. What’s more, they often have to spend less (as a % of revenue) keeping a regular buyer, than attracting a new buyer.

All buyers are important, but we think ‘real buyers’ are particularly important. So, what are the signs that someone is a real buyer?

They are prepared to buy your brand at base price. They are not buyers who only ever buy you when you are on deal. They may not always buy you at full price – often they don’t need to. Indeed some real buyers actually spend a lot less on a brand than they are prepared to pay, because of the amount of time a brand spends on promotion. However, real buyers consider base price a fair price for the brand.

They buy your brand most of the time. Not every time, but most of the time.   There are a lot of buyers who appear in your penetration figure, but spend most of their money on other brands or in other stores. Real buyers buy your brand or come to your store more often than not.

They would choose your brand in a ‘brand line up’. In a line up of brands with no promotions and just the brands and the price points, they would choose you. That choice signals their real choice, not the choice that has been influenced by promotional bribes.

They would recommend your brand to other people. And that doesn’t mean telling a friend ‘buy brand X, it’s always on deal’. They will proactively recommend your brand to other people, maybe even write a positive online review. A lot of Aldi and Lidl’s success in recent years has been down to this type of recommendation.

They would enter into some form of relationship with the brand (or store). This doesn’t just mean yours is one of 5 loyalty cards that sit in their purse or wallet. It means buyers who are prepared to enter into a more active relationship and exchange their loyalty for benefits they get from the store or brand. Real buyers want to hear from you when you are not just offering them a discount.

Growth isn’t about penetration or loyalty. It is about both. In the quest for the Holy Grail of penetration, don’t forget about your real buyers. Because if you do, they might just leave you and that will hurt you much more than the part time buyer – the ones who buy or visit you once or twice a year.

Do you know how many real buyers you have? And what are you doing to get more of them?

Feel free to forward.  Have a great weekend and speak to you next week.