Finding ways to grow sales has never been tougher. Despite intense competition and increasing fragmentation, a handful of companies are still finding growth opportunities within their existing customer bases. In fact, by identifying a category’s ‘Super-Consumers’ – those consumers that are both highly profitable and engaged, companies are tailoring their marketing and sales efforts to boost incremental sales—even when category sales are flat.
According to Eddie Yoon, Principal at the Cambridge Group, finding and delighting your Super Consumers is a way of growing your business without adding a lot of complexity. “The opportunity is right there, and many companies can tap into their super-consumers using the data and information they already have and are working with,” says Yoon.
SUPER-CONSUMERS ARE THE SWEET SPOT BETWEEN THOSE THAT ARE HIGHLY PROFITABLE AND THOSE THAT CARE A LOT
Super-Consumers sit at the intersection of heavy users and highly involved consumers, which means they’re both emotionally and economically engaged in the category.
According to Nielsen research, this group of consumers in the US account for 10 percent of a category’s customers and anywhere from 30 to 70 percent of a brand’s sales. They represent a key opportunity for brands looking for growth when growth is elusive.
Super-Consumers are just as lucrative in the NZ market. Rob Clark, Nielsen’s Managing Director of NZ, “Looking across all FMCG categories in NZ, we believe there are a group of consumers in every category that are both highly profitable and highly engaged. They have a hidden appetite to buy more even in the most unlikely product categories.”
“When companies prioritize these super-consumers they see unprecedented growth, with a direct correlation between brand share of category dollars and brand share of super-consumer spend,” says Clark.
By flipping the lens to look at super-consumers companies open up a whole slew of possibilities and insights that hadn’t previously recognised as growth drivers.
CASE EXAMPLE: CHEESY LOVE MELTS HEARTS OF KRAFT’S SUPER-CONSUMERS
Just over a year ago, Nielsen U.S, through its wholly-owned subsidiary The Cambridge Group, was engaged by Kraft’s senior leadership to help rejuvenate growth for its cheese/dairy business unit. Velveeta, a processed, unrefrigerated ‘cheese food’, was experiencing flat to declining sales as demand shifted towards natural and organic non processed cheeses.
1. Identifying the Super-Consumer:
By recognising a strong Super Consumer base that hadn’t been previously tapped into – the ‘hot melted cheese super-consumer’, Velveeta cheese was identified as a growth opportunity. This Super Consumer represented 10 percent of Velveeta’s consumers, but drove 30-40 percent of sales and more than 50 percent of profit. So what was their unifying characteristic? A love and passion for the product in addition to diverse ways of using it.
2. Innovating through the lens of the Super-Consumer:
Those super-consumers had unmet needs – they craved more usage inspiration for their beloved cheese. By viewing Velveeta in the broader melted cheese category rather than the previous cheese loaf, Kraft was able to reinvent the way Velveeta could be used, which informed product development. Recently launched products such as refrigerated Velveeta slices and refrigerated shredded Velveeta had performed surprisingly strongly, which took on incremental importance in light of the valuable super-consumer strategy. The range of new product launches as a result of these insights delivered more than $100 million in sales to Kraft.
3. Retail optimisation:
Activating against the needs of super-consumer also drove in-store decision making. Based on super-consumer insights, some retail partners began moving Velveeta to the refrigerated dairy aisle, where products have a much higher rate of sales.
Not only did Velveeta see a notable uplift in brand growth – ahead of the competition and category, but just as importantly managers believed they had a found a viable growth strategy.
SUPER-CONSUMERS OF ONE CATEGORY ARE THE SUPER-CONSUMER IN AT LEAST NINE OTHERS
Typically super-consumers of one category are super-consumers of nine others. This provides companies with a significant number of options to activate Super Consumers, particularly cross category initiatives. Whilst many of the adjacent categories will be obvious (e.g. a Super Consumer of Milk may very well be a super-consumer of Breakfast Cereals), many are not, which provides a lot of untapped potential.
This is incredibly powerful for mega brands; brands that span multiple categories (e.g. Nestle, Dove, Huggies and Heinz). For these brands, rather than having a different target consumer for every category, companies can identify a single super-consumer that cares a lot and spends a lot across all of their categories. Finding and delighting this Super Consumer enables a mega brand to effectively develop loyalty strategies and optimise growth across not just one, but multiple categories they play in.
Has your company tapped the wisdom of its super-consumers? Are you willing to listen to them — and respond?
These insights were presented at Nielsen's Consumer 360 conference (July 31 - Aug. 1, Fairmont Resort, Blue Mountains). Eddie Yoon, Principal at the Cambridge Group, shared his views on the big challenges for brands in the future. Does globalisation help or hinder brand development? How do we find the consumers and audiences for existing brands? And who is doing a good job of creating big outcomes for their brands?