Here’s a pop quiz to test your marketing knowledge. Consider the following statement and answer whether you think it’s true or false:
Fanatical customers are critical to growing a brand because they act as unpaid ambassadors who broadcast word-of-mouth.
What was your answer? The reality is that this statement is both true and false. Yes, it’s true that fanatical customers (a.k.a. – “heavy buyers”) are important to sales. However, the world’s foremost researcher on marketing science, Dr. Byron Sharp. shows that most brands have far fewer fanatical customers than they think. And, their capacity to spread word-of-mouth is limited by numerous factors, such as the number of people they know, etc.
The problem is that many marketers who work for businesses, non-profits, and book publishers think their brands are the exception and that they have more consumer evangelists than average. For example, let’s apply this misconception to two of the most popular brands in America – Apple computers and Harley Davidson motorcycles. In his book, How Brands Grow, Dr. Sharp studied these companies and found some surprising information.
For instance, most people would tell you that Apple and Harley-Davidson have some of the most fanatical customers in the world. Yet, the research may surprise you. As you can see from three separate surveys displayed below conducted in 2011, Apple’s repeat purchase rate of computers was only 24%, 33%, and 36%, which was significantly lower than its competitors, such as Dell and HP.
What about Harley Davidson? Are their fanatical customers really that loyal? A consumer study identified a segment of Harley owners classified as passionate brand loyalists. They were the most likely to agree with statements, such as “When I’m on my motorcycle people seem to be admiring me.” But, the study revealed that these Harley owners actually spend the least on accessories for their bikes and buy the smallest models. Consequently, they represent less than 10% of Harley’s sales revenue.
In contrast, another analysis of Harley riders (Swinyard, 1995) found that the largest segment of owners (40%) received little psychological satisfaction from riding. These Harley riders were most likely to agree with the statement “Most of the time my bike is parked” and least likely to agree that, “My bike is everything to me.” Yet, this non-fanatical group represents almost 50% of Harley Davidson’s sales revenue.
To sum it all up, Harley owners who rated highest on attitude loyalty turned out to be worth least to the company per customer. And, they contributed the least amount of revenue because the passionately loyal segment was very small.
This isn’t to say that Apple and Harley-Davidson don’t have fanatical customers. They certainly do. But, those customers only makeup a small group compared to the less ardent typical type of customer. Plus, their numbers aren’t much larger than their competitors’ amount of fanatics.
What does all this research tell us? Fanatical customers only have a limited impact on growing a brand’s sales. Why? In reality, most people think and care little about a brand. For example, how often do you sit around thinking about your preferred brand of laundry detergent, coffee, cereal, or sports equipment? Not very often, right?
Yet, marketers should care about non-fanatical customers, because they represent a significant part of a brand’s sales. According to Dr. Sharp’s research, usually around 40% or more. Therefore, a brand needs to attract non-loyal customers in order to increase sales long-term over time.
It may sound counterintuitive, but attracting non-loyal customers is the best strategy to grow a brand. You may be able to launch a new brand on the backs of fanatics. But, growing a brand based on fanatics is a fantasy. Research proves that expanding a brand over time depends on attracting lots of average, fickle customers. They may act apathetic, but they’re worth the money and marketing to reach them.
