Paradigm Shift in Aisle 4
Recently I had an opportunity to observe consumers make purchases at retail. Their behavior wasn’t different from the norm...it’s just that I never stopped for a couple of hours to study, compare and contrast the behavior of my fellow shoppers. It brought home a number of realizations:
- The CRM/forecasting models we work with to estimate (ROI) impact are a pale abstract of what happens in the real world.
- Consumers are much more tactile with our products than we recognize.
- Consumers are getting older and can't read mouse type copy anymore...but they sure spend a lot of time trying to read ingredient and nutritional labels.
- The cognitive selection process of picking brand A vs. brand B or C is far from being an either/or choice, its more like a billiard ball careening on a pool table (A to B to F to B to C) even ‘jumping tables’ to adjacent categories/brands instead. Who we think our brand buyers are and the buying process they go through is likely to amaze, confound and humble you.
This last point is perhaps the most important I wanted to highlight, as it brings to focus the need to rapidly evolve from push-based thinking if we hope to survive. Trying to compete in a world filled with an ever increasing number of options can only become more expensive and less effective. And in that environment trying to tweak the efficiency of offer push-based CRM programs is ….well, quaint.
If we ever hope to constrain the competitive set and thrive we need to shift our paradigms to pull-based thinking and programs. Because try as we might there always seems to be something a little less expensive or with a little more 'bling' that pops out of nowhere to carve out yet another slice from our pie.
To get there we will need to expand and challenge our thinking on what the numerators and denominators need to be in our metrics. And for those who truly want to be humbled, examine and understand the stickiness of our results. We need to be honest with ourselves and develop confidence intervals in our campaign metrics and come to reconsider whether the DNA of customer profit was ever encoded in our CRM formulas.
A starting point might be to estimate/measure the share of requirements our brands were under consideration for at the time of our various initiatives. It’s not the fact that “10%” of those who received our offer(s) and responded that’s of ultimate importance. But that our programs were able to tap into “30%” of the category purchase activity at the time AND made value added connections with 100% of the customers we reached out to, whether they purchased or not.
That change in perspective alone will send you down a new path. To recognize those who understand the strategic superiority of pull-based programs you will only need to look at the font size of their nutritional labels.
Cheers
