Marketers need to observe their customers in action – it’s important to understand habits at the point of purchase. Photograph: Alamy.
Branding discussions often focus on positioning and market segments. If a brand is not selling as well as it could, the assumption is that it must not be reaching its target audience with the right message. And if the team could only develop the right message, the brand would take off.
In most cases, though, positioning does not matter much. The Ehrenberg-Bass Institute has examined purchase data from various product categories. As explained in the institute director Byron Sharp’s book, brands in a product category differ in their market share, but the pattern of sales within each market segment is about the same. If brands really differed in their positioning, then different segments should have a different set of preferences for brands.
If positioning isn’t driving sales, what is?
Habits. Market research often examines patterns of household purchases over time in order to tease out the influence of particular marketing campaigns, price changes, and news events on the products people buy. When these analyses are performed, the factor that explains most of what people are doing is usually called “brand loyalty.” That is, the best predictor of what people are going to do in the future is what they have done in the past. And that reflects their habits.
If habits are so important, why aren’t they central to branding discussions?
Part of the problem is that marketers still develop insights about their brands from asking consumers in focus groups and surveys. Unfortunately, habits are driven by structures deep inside the brain that do not connect well to the areas that are crucial for telling stories and responding to survey questions.
So when you ask people why they choose a particular brand, they tell you a story comprised of information that is easy to access. Most of that accessible information comes from adverts and experience about the product. But the real driver of their behaviour is their habits.
That is a problem, because marketers assume that what they are being told is driving what their customers are doing. If the features that consumers say are crucial are affecting choices, then it is natural to focus positioning and marketing decisions on those features. After all, if you could change customers’ opinions about those features, you ought to be able to change their preferences — and ultimately affect their choices.
Because behaviour is really being driven by habits, affecting what people think will not have a strong influence on what they do. Instead, marketers need to observe their customers in action. Watch their habits. It is important to understand habits at the point of purchase (whether in store or online) as well as at the point of use.
Now comes the tricky part. You want to help the customers who already purchase your product to maintain their habits. At the same time, you want to find ways to intervene on the habits of users of other brands.
A great example of this strategy in action in the United States is the Dollar Shave Club, which sells a subscription for razor cartridges. Before this service, men would purchase their razor blades in shops on an as-needed basis. Brand loyalty was imposed by selling the handle to the razor cheaply, and that handle fit only one brand of cartridges. The Dollar Shave Club, which recently became the second-largest seller of cartridges in the market, changed people’s habit by delivering cartridges monthly to the home.
Ultimately, strategies like this are successful because of their ability to influence the actions customers perform habitually rather than because of the positioning of the product. Great ad campaigns can capture attention, but unless you can affect the way people act, you will not get them to buy your product.
Dr Art Markman is a professor of psychology and marketing at the University of Texas, and founding director of the programme in the human dimensions of organisations. He is the author of several books including Smart Thinking, and Smart Change.