How companies should treat their most enthusiastic customers
Research shows that firms ignore passionate consumers at their peril
Dec 3rd 2016, 00:00
THE hero of Nick Hornby’s novel, “High Fidelity”, cannot get enough of vinyl records. By day Rob Fleming runs a record shop where he spends his time sampling the stock and constructing fantasy compilations with his equally obsessive assistants. By night he moons over his favourite songs. “Is it so wrong, wanting to be at home with your record collection?” he asks himself. “There’s a whole world in here, a nicer, dirtier, more violent, more peaceful, more colourful, sleazier, more dangerous, more loving world than the world I live in.”
Rob is an example of what management gurus dub “super-consumers”, “lead consumers” or “high-passion fans”. Only a tenth of customers are super-consumers but they account for 30-70% of sales, an even greater share of profits and almost 100% of “customer insights”, says a new book, “Super-Consumers”, written by Eddie Yoon of the Cambridge Group, a consultancy.
These people are not defined simply by the amount of stuff they buy (though they tend to be heavy users), but by their attitude to the product. Like Rob, they regard the things that they consume as answers to powerful emotional needs. Super-consumers exist in every imaginable consumer category, from the glamorous to the staggeringly mundane. There are people who wax lyrical about the serial numbers inside toilet rolls or who worship at the altar of Kraft’s Velveeta processed cheese, which they call “liquid gold”.
Often, Mr Yoon points out, companies treat super-consumers as weird obsessives to be dismissed or ignored. That is a mistake, for they can, when treated well, propel growth. As well as buying large quantities themselves, they infect their social circle with enthusiasm. American Girl, a maker of upmarket dolls, discovered that typical consumers spend a fifth more in markets where super-consumers are clustered.
High-passion fans often come up with ideas for improving products. They can also reveal interesting patterns in consumer markets: Generac, a producer of standby generators, discovered that people who buy lots of their generators are also more likely to be enthusiastic consumers of fridges (they often have several stocked up with food), multivitamins and life insurance. These are customers, in other words, who wish to be prepared for all eventualities.
But the most important role of super-fans is to force companies to focus on their core business. Managers love to immerse themselves in the side-disciplines of business—analysing big data or re-engineering supply chains. Super-consumers remind them that these are just a means to an end. Executives need to make sure that they often spend time with them—sitting in on product tests, joining chat rooms and hanging out at customer conventions. Blockbuster kept its accountants happy but alienated its core customers by charging late fees. Netflix, by contrast, keeps its disciples on board with constant binge-watching fodder.
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How can companies strengthen their connection with super-consumers? The first thing to do is to discover them. Given all the data that companies are spewing out, they are not that hard to spot: they are the people who keep buying your stuff through thick and thin. The priority is to identify members of the all-important category of young, up-and-coming super-consumers. Companies can learn a lot about these people by studying their Twitter feeds or by reading those letters of complaint that show an emotional connection to the product. Some firms go further still: Nike and Adidas, for example, employ ethnographers to study their users “in the field”.
The second task is to reward super-consumers for their loyalty. Fans adore being recognised by the objects of their affections. Airlines have excelled in this by creating a ladder of rewards for frequent flyers. Spotify identifies fans of particular musicians by studying their listening habits and then sends them offers for tickets when they are in town. Two American political magazines, The Nation on the left and the National Review on the right, both put on cruises that allow their most dedicated readers to hang out (for a price) with their star writers.
The main danger with taking super-consumers seriously is that companies may get trapped in their existing business model. Clayton Christensen of Harvard Business School pointed out in his book “The Innovator’s Dilemma” that a big threat to established firms is that they focus obsessively on their most loyal customers at the same time as insurgents reinvent entire business categories. IBM, for example, was listening to people who wanted marginally better mainframe computers when Microsoft was pushing ahead into PCs.
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