The Last Purchase of a Heavy Buyer

Having an older English Staffordshire Bull Terrier is like taking care of a senior in the house. Our dog Indy celebrated his 15th birthday on 19th May 2023, which means that he’s roughly over 108 years old in human terms at the moment. At the end of September, he yelped when he tried to munch on the dental care stick that I gave every time I left for work. I started this tradition for many years, so he’d associate my leaving the house with receiving treats. On this occasion, Indy abandoned the stick — and still wanting to munch it, tried again and yelped one more time when the stick hit a presumably sore area in his mouth. I knew then, that I had probably made my last purchase of the category. For now.

The realisation that I could exactly pinpoint the last time I bought the category and the brand made me think about consumer behaviour and brand growth.

If somebody analysed my supermarket transaction over many years – they would find that I was a heavy buyer of dog care and treats and the particular brand of dental care sticks. I purchased a box regularly, supplemented with single packs occasionally when they were on specials. I was probably the type of buyers that traditional marketers would wish to retain and whose loyalty was to be ‘nurtured’. With the popularity of loyalty programs, buyer circles, and consumer packaged goods’ subscriptions, a prolonged purchase cessation would set off an alarm to the brand team. It would typically kickstart a whole lot of retention process — inquiries on why the buyers had stopped purchasing and offers on how to win them back. Some of these questions may even be the wrong questions to ask, with answers that may not be helpful at all for the business.

I used to manage retention activities in banking and finance in the first five years of my career in Indonesia, during the heights of the Asian financial crisis. This was the time when the bank’s customers would close their credit card accounts in droves. The team would monitor their usage close to their renewal time, and set a benchmark on those who should be saved based on their profitability if their transactions showed a decline. We were given the mandate to stem the bleeding, when customer acquisition was just too tricky in a rocky economy.

Returning to my personal example with dental care sticks, as the category needs has disappeared due to my aging best friend, there is nothing that the brand could do to change me back to the heavy buyer that I was – to no fault of the brand nor the product.

This is the limitation of relying on customer retention for brand performance. If we know the marketing science and principles, we’d know that all brands lose buyers, including growing brands. Investing much of precious resources into stemming the loss may be counterproductive when compared to channeling the investment into acquiring more buyers. Increasing brand penetration is vital for sustainable growth. Imagine the type of navel gazing questions that would be asked to lapsed buyers and the kind of product tinkering and R&D that may be unnecessary. When I was a heavy buyer of the category and the brand, all I wanted was to be able to find them ready-stocked across the supermarkets whenever I needed to buy some for Indy — this is what is described as physical availability. Indeed, this is the case across any categories I need to purchase: as long as I can find the product I need, I’d be content. It’s great if it is on special, but fine if it’s not – there are some needs that cannot be delayed until the brand or the product is discounted.

Of course, there are cases when products need to be improved to increase their sales among category buyers – however, many of these products with ‘improved flavour’ or ‘new formula’ are really unnecessary (Coincidentally, this is the topic of my inaugural blog post!). When the brand does poorly in the market, it may not be because of the product itself, but because we, marketers, have done a sub-par effort in selling and supporting the product – just like what I posted previously as well.

On the topic of heavy buyers — it is also important to note that there is no guarantee that heavy buyers would remain heavy in the next period. A research by Romaniuk and Wight at the Ehrenberg-Bass Institute found that around half of heavy brand buyers would remain heavy in the following year, and that two-thirds of heavy category buyers would remain heavy category buyers in the next year. Along with colleagues at the Institute and beyond, I conducted a recent research that looked into heavy buyer stability across department store shoppers – and found something similar. On average, around half of shoppers who spend a lot of money or made a lot of transactions in a particular department (e.g., clothing or décor), would remain heavy buyers in the following year. There are all sorts of changes that could happen over the course of the year: life intervenes which alters our category and brand consumption. We may be a non-buyer one year and switch to be a heavy buyer next year — and all sorts of possible category and brand buying permutations. These two studies that I have highlighted give some guidance or benchmark on what we can expect on the stability of the heavy buyers.

In my case, my conversion from a heavy buyer to a non-buyer of dental care sticks coincided with my transformation from being non-buyer to a heavy buyer of dental health solution products for my pooch. If I didn’t have any mental availability of the category nor the brand, I wouldn’t have made the purchase. Again, this highlights the importance of reaching any potential buyers of the brand – not just the current heavy buyers.

Brand owners would never know which of the heavy buyers who would remain heavy, reduce, or cease their purchases altogether – nor would they know who would make the move from being non-buyers to become light or heavy buyers. For brand owners and marketers, herein lies the importance of keeping the focus on the whole horizon of category buyers with wide-reaching mental availability activities and keeping the brands widely available to purchase – from the heavy to the non-buyers – rather than fixating on a smaller group of heavy buyers.