Understanding the consistency of consumer buying patterns and the role of loyalty is an important part of marketing
Mark Pacchini, half of the infamous Marks who ran SC Johnsons worldwide marketing efforts, sauntered into my office, threw some flowcharts on my desk and said, Your media plans are boring.
Ill call George Carlin right away, I said, but whats the problem specifically?
Well, he said, they show solid lines. No flights, no spiking heavy ups, just straight lines.
I thought about it and realized one thing: we, as people, are boring! Boring, boring, boring.
Have you ever thought how people actually buy stuff? As the media director for the launch of Diet Coke in Mexico and Quatro in Argentinaand having worked on marketing every other Coca Cola productmy shopping pattern for soft drinks was simplicity itself: every week I would pick up four 2-liter bottles of Coca Cola, put them in a shopping bag, schlep them home and put them in the refrigerator.
Then, one day, at a friends house, I tasted Sunny Delight and loved it: good flavor and, important as we grow older, no carbonation!
So, the following week, I bought three 2-liter Coke bottles and one 2-liter Sunny Delight. That continued for a few weeks. Then my daughter discovered it and started drinking it. Soon we were buying two 2-liter Coke bottles and two 2-liter Sunny Delights.
In six months, my soft drink shopping was simplicity itself: four 2-liter bottles of Sunny Delight per week.
In their 2002 study, Why Brands Grow, Allan L. Baldinger, Edward Blair and Raj Echambadi, pointed that loyalty changes are the second most important factor in share change. Interestingly, the difference that loyalty makes among large brands (those with high shares) is huge compared to starter brands (those with low shares).
You probably define loyalty in human termsnot cheating, being constant. In marketing, we define loyalty simply: the number of times you buy a certain brand over the total number of times you buy that product. For example, you buy 12 tubes of toothpaste per year. If you buy six tubes of Crest, your loyalty is high: 50 percent.
For all brands (353 in the study), the correlation between share change and change in loyalty was a decent 59 percent but, for high-share brands, this correlations shoots up to 81 percent while, for low-share brands, the correlation is 62 percent.