Keeping up with evolving consumer behavior can sometimes feel like a rollercoaster ride. Brands seem to rise and fall at the whims of their customers, heading toward success or failure at breakneck speed. But even in the midst of uncertainty and a changing consumer landscape, there are still fairly consistent ways to determine how consumers might respond to your brand and what you can do to influence their behavior and accelerate brand growth.
One place to start is by finding out if you should prioritize acquiring more customers or retaining the ones you have. Whether you choose the acquisition or retention route is largely dependent on your position in the market among your current competitors. To form a more accurate and detailed picture of the position you occupy and where you can gain an advantage, it’s helpful to get insight into your existing customers via targeted surveys, and then enhance the survey results with big data.
Let’s dive deeper into how you can use data and insights to stay ahead of consumer evolution by looking at the pizza category and the Papa John’s brand in particular as an example.
Understanding your market position
One of the most telling ways to pinpoint if your brand is poised for growth or vulnerable to decline within your category is to pay attention to both “behavioral loyalty” and “attitudinal equity.”
Behavioral loyalty is action-based. It’s when a customer continues to purchase the same brand or buy in the same store; they’re loyal to the brand without giving it much thought. On the other hand, attitudinal equity is attitude-based. It measures a mindset, or how well a brand psychologically meets a customer’s needs and desires.
In the pizza category, Papa John’s didn’t have the highest market share among competitors as you can see from the graph below. But they did have the potential to grow their brand by acquiring customers rather than just retaining them. Specifically, they could leverage the attitudinal equity advantage they had — that is, the ability of their brand to psychologically meet their customers’ needs — to boost their brand through acquisition.
This is the type of knowledge you can gain about your market position when you combine very specific survey data with big data.
Taking a closer look at loyalty
Your own loyal customers are one thing, but so are the loyal customers of your competitors. And it’s sometimes hard to know if there’s a viable opening for you to acquire a share of another brand’s customers, just as it’s equally hard to know if the customers you thought were loyal to your brand could just as easily start purchasing another brand.
To help them further flesh out an acquisition strategy, we provided this breakdown of the current consumer landscape in the pizza category:
- 3% of pizza customers said they were loyal to Papa John’s, meaning they purchased the Papa John’s brand most often and rated it highly
- 9% of pizza customers purchased the Papa John’s brand most often but didn’t rate it highly; this is considered a Flight Risk segment
- 21% of pizza customers purchased a competitor most often but also didn’t rate that competitor highly and had considered the Papa John’s brand before; this is another Flight Risk segment
- 51% of pizza customers purchased a competitor most often and either rated it highly or hadn’t considered the Papa John’s brand at all
- 16% of pizza customers were rejectors, meaning they would never purchase the Papa John’s brand
The Flight Risk segments were the most telling here. These segments held the most potential to switch brands, either away from Papa John’s to a competitor, or away from the competitor to Papa John’s. The Flight Risk segment that was likely to drift away from other brands was the golden opportunity for Papa John’s and their customer acquisition strategy. The company could acquire up to 21% of current category purchasers from its competitors, which was at least 11.68 million new customers.
Acquiring customers from competitors
If customer acquisition is your strategy, the next question is how to acquire them. There are two main factors to give weight to: 1) purchase considerations, and 2) when and where to reach customers.
Among the Flight Risk segment that Papa John’s could acquire, you can see below that taste, price, and quality were the biggest purchase considerations by these customers. In this case, the purchase consideration index scores were derived from survey data and showed the likelihood of the group to have these considerations compared to pizza buyers in general.
It’s all well and good to know what’s driving customers’ purchase decisions, but you also have to get in front of them at the right time and in the right places where they’re most likely to notice your messages.
The data showed that Papa John’s potential new customers spent time watching traditional TV, surfing websites, and browsing and posting on social media networks. To be specific, Papa John’s could advertise on TV on the NFL network between 8-11 p.m. to have the greatest chance of reaching their new customers. They could also reach them between 5-8 p.m. over email or on Facebook while customers were surfing, searching, and posting online.
If Papa John’s wanted to, they could also receive help with their messaging to make sure their ads and other communications are resonating with their most profitable customers, based on the personality traits that made those customers unique.
Regardless of the industry you’re in, building highly relevant and personalized products and communications helps drive both new customer acquisition and customer retention while also positioning your brand more competitively in the market.
Gaining some control in the midst of change
It may seem like consumers always have the upper hand in some ways. As complex humans, they’re responding to changing internal needs and outer circumstances, which leads to shifts in attitudes and behaviors in ways that may not always seem predictable.
But using surveys and data to better understand your market position and the consumers who are driving it can give you some control over the direction you should take your brand in the market.
Together, survey insights and big data can give you specific, detailed measurements around customer loyalty, purchase considerations, messaging timing and effectiveness, and other factors to help you determine if your brand-growth strategy should be one of acquisition or retention. Once you have a more solid idea of who your most profitable customers are in the current market — whether those customers are already yours or someone else’s — you can take more deliberate and effective steps to stay ahead of consumer evolution.
Download the case study below to see how a F500 QSR company leveraged this type of strategy to identify a unique audience of early adopters to position their new menu innovation around.