Morning!
All brands have light buyers - folks who rarely buy from your category and infrequently buy your brand.
They’re no friends of yours! So, you ghost them.
You don’t include them in your marketing plans or campaign briefs.
That’ll show ‘em!
Plus, you have so much more to sell to your existing customers.
Thankfully, people make rational decisions and pay close attention to everything we tell them.
But just for amusement, let’s look at this interesting bit of data.
About 4% of Coke’s fans buy the brand once a week.
That’s 20% of Coke's sales revenue per year.
Now, your average Jane picks up a can once or twice a year and brings home over 50% of their yearly sales revenue!
And numbers like that shouldn’t just bother B2C marketers.
In my experience, the market shares of many global B2B brands are shrinking as smaller and more agile competitors keep stealing their light customers away.
But that’s okay, because you still have your largest customers as long as you’re willing to let them eat through your margins.
Allsprite! Right?
A recession is the best time to grow your brand.
During a recession, most brands do the logical thing and cut their spending. That means not spending anything on reaching the light buyers in their category.
But brands grow when their marketing increases their market share by reaching everyone in the category.
And ignoring light buyers shrinks your brand.
We even have data that proves it.
Decades of data from marketing effectiveness studies show that:
20% of a brand’s heavy buyers drive 50% of its sales revenue.
30% of a brand’s medium buyers drive 30% of its sales revenue.
50% of a brand’s light buyers drive 20% of its sales revenue.
(These are approximations but the reality doesn’t go too far off this scale.)
By focusing on your heaviest buyers you’re ghosting 80% of the customers in your category and 50% of your sales volume.
And this kind of ghosting is only hurting you.
Because these light and medium buyers are getting attention from other brands who are still marketing to that category.
Remember this.
All brands have many light buyers who only buy the brand occasionally (or buy less in volume)
Medium and light buyers are the largest buying group in most categories.
Marketing can increase a brand’s market share by reaching as many people in the category as possible - not just the heavy buyers.
Brands grow when marketing succeeds in increasing market share. Shrink your market share and your revenue will shrink too.
When you reach everyone in your category, you will inevitably reach the heavy buyers as well.
Stay curious!
Aliyar